(Groww) BILLIONBRAINS GARAGE VENTURES LIMITED IPO Explain

Billionbrains Garage Ventures (Groww) IPO Overview

India’s largest retail investment platform by active NSE users raising ₹6,632.30 cr (₹1,060 cr fresh + ₹5,572.30 cr OFS). Price: ₹95-100/share. Lot: 150 shares (₹15,000). Funds for cloud infra, marketing, NBFC subsidiary, MTF business. Lead: Kotak, JP Morgan, Citi, Axis, Motilal Oswal. Competes with Zerodha, Angel One, Upstox.

IPO DETAILED INFORMATION

Issue Details

Parameter	Details
IPO Type	Mainboard
IPO Open Date	4 November 2025 (Tuesday)
IPO Close Date	7 November 2025 (Friday)
Anchor Investor Bidding	3 November 2025 (Monday)
Allotment Date	10 November 2025 (Monday) – Expected
Credit to Demat	11 November 2025 (Tuesday) – Expected
Refund Initiation	11 November 2025 (Tuesday) – Expected
Listing Date	12 November 2025 (Wednesday) – Tentative
Price Band	₹95 – ₹100 per share
Face Value	₹2 per share
Lot Size	150 shares
Min Investment (Retail)	₹15,000 (1 lot of 150 shares at upper band)
Max Investment (Retail)	₹15,000 (1 lot) – 10% retail allocation only
sHNI Investment	₹2,10,000 (14 lots / 2,100 shares)
bHNI Investment	₹10,05,000 (67 lots / 10,050 shares)
Issue Size	₹6,632.30 crore total
Fresh Issue	₹1,060 crore (16%)
Offer for Sale (OFS)	₹5,572.30 crore (84%)
Total Shares Offered	66,32,30,051 equity shares
Listing	BSE & NSE (Mainboard)

Issue Break-up

Category	Allocation
QIB (Qualified Institutional Buyers)	Up to 75% of Net Offer
NII (Non-Institutional Investors)	Not more than 15% of Net Offer
Retail Individual Investors	Not more than 10% of Net Offer

Note: Unusually low 10% retail allocation – heavily skewed toward institutional investors.

Selling Shareholders (OFS ₹5,572.30 crore)

Major Investors Exiting:

1. Peak VI Partners Investments
2. YC Holdings II
3. Ribbit Capital V
4. GW-E Ribbit Opportunity V
5. Internet Fund VI
6. Kauffman Fellows Fund
7. Alkeon Innovation Master Fund
8. Propel Venture Partners
9. Sequoia Capital Global Growth Fund III

Note: 84% of IPO proceeds go to selling investors, indicating significant early-stage investor exit.

Objects of the Issue (Fund Utilization)

Fresh Issue Proceeds (₹1,060 crore) will be used for:

1. Cloud Infrastructure Investment – ₹152.5 crore (14.3%)
2. Brand Building & Performance Marketing – ₹225 crore (21.2%)
3. Investment in NBFC Subsidiary – ₹205 crore (19.3%) to capitalize Groww Creditserv Technology Private Limited
4. Investment in MTF Business – ₹167.5 crore (15.8%) to fund Groww Invest Tech Private Limited for Margin Trading Facility
5. General Corporate Purposes – ₹310 crore (29.4%) including unidentified acquisitions

OFS Proceeds (₹5,572.30 crore):

• Goes entirely to selling shareholders
• Company receives zero funds from OFS
• Provides exit liquidity to venture capital and institutional investors

Lead Managers & Registrar

Book Running Lead Managers (BRLMs):

• Kotak Mahindra Capital Company Limited
• J.P. Morgan India Private Limited
• Citigroup Global Markets India Private Limited
• Axis Capital Limited
• Motilal Oswal Investment Advisors Limited

Registrar:

• MUFG Intime India Private Limited (Link Intime India Private Limited)
• Address: C-101, 1st Floor, 247 Park, L.B.S. Marg, Vikhroli West, Mumbai – 400 083
• Phone: +91-22-4918 6270
• Email: [email protected]
• Website: https://linkintime.co.in/Initial_Offer/public-issues.html

Promoters & Management

Key Founders:

• Lalit Keshre – CEO & Co-founder (stake worth $650 million post-IPO)
• Harsh Jain – Co-founder
• Ishan Bansal – Co-founder
• Neeraj Singh – Co-founder
• Combined founder stake value: $1.9 billion post-IPO

Company Contact:

• Registered Office: Vaishnavi Tech Park, South Tower, 3rd Floor, Sarjapur Main Road, Bellandur, Bangalore Urban, Karnataka – 560103
• Phone: +91 80 6960 1300
• Email: [email protected]
• Website: www.groww.in

COMPANY OVERVIEW

Establishment & Background:

• Incorporated in 2017 (platform launched 2017-18)
• Industry: Financial Technology (Fintech) – Digital Investment Platform
• Headquarters: Bengaluru, Karnataka
• 7-8 years of rapid growth revolutionizing retail investing in India
• Founded by ex-Flipkart employees Lalit Keshre, Harsh Jain, Ishan Bansal, Neeraj Singh

Business Model:

• Technology-driven direct-to-customer digital investment platform enabling retail investors to build wealth
• Operates a “freemium” model attracting users with commission-free direct mutual fund investments
• Revenue streams:
  1. Brokerage & transaction fees (84.50% of FY25 revenue) from stocks, derivatives, IPOs
  2. Distribution fees/commissions from mutual funds and bonds
  3. Interest income from margin trading facility (MTF) and personal loans
  4. Asset management fees from Groww Mutual Fund
• Multi-product ecosystem approach keeping customers engaged across investment lifecycle

Market Position:

• India’s largest retail investment platform by active users on NSE (14.4 million as of June 2025)
• 26.3% market share among retail investors on NSE (surpassed Zerodha in 2024)
• Fastest-growing broker – Added 760,000 net transacting users in Q1 FY26
• 38.18% of total new app downloads among top 5 brokers since FY22
• Captured highest search interest among top 10 brokers in Fiscal 2025 (Redseer Report)

Operations:

• 1,415 employees as of June 30, 2025 (lean, technology-first organization)
• 100+ million cumulative app downloads
• 14.4 million active users (as of June 2025) growing at 52.74% CAGR (FY23-Q1 FY26)
• 18.1 million transacting users demonstrating high engagement
• 98.36% pin-code coverage across India – presence in nearly every postal code
• 81% users outside top-6 cities indicating deep Tier-2/Tier-3 penetration
• Daily Active Users (DAU): 7.1 million
• Monthly Active Users (MAU): 12.6 million
• DAU/MAU ratio: 56.29% in FY25 (strong engagement)
• Average user spends 65.50 minutes per day on platform (FY25)
• Product offerings: Mutual funds, stocks (equity & derivatives), ETFs, IPOs, digital gold, U.S. stocks, bonds, personal loans, margin trading

Company Strengths

1. Dominant Market Leadership & Brand Recognition:
   • India’s largest broker by active NSE users (14.4 million, 26.3% market share)
   • “Groww” brand widely recognized across cities, towns, and villages
   • Highest search interest among top 10 brokers (Fiscal 2025)
   • Strong brand equity enabling low-cost organic customer acquisition
   • 98.36% pin-code coverage demonstrating pan-India reach
2. Exceptional Organic Growth & Low Customer Acquisition Costs:
   • 83.16% of customers acquired organically in FY25 (vs paid marketing)
   • 38.18% share of new app downloads among top 5 brokers since FY22
   • Customer acquisition cost significantly lower than industry average
   • Virality and word-of-mouth driving growth
   • Network effects creating self-reinforcing growth flywheel
3. High Customer Retention & Engagement:
   • 77.7% of 3-year cohorts remain active users – industry-leading retention
   • Initial quarterly retention post-acquisition: 84.79% to 92.98%
   • Users spend average 65.50 minutes per day on platform
   • DAU/MAU ratio of 56.29% indicating daily habit formation
   • Content-driven engagement strategy building loyalty
   • Price in-elasticity – demand sustained despite fee hikes (Oct 2024 brokerage increase)
4. Technology Leadership & In-House Stack:
   • Proprietary technology platform built in-house
   • Capable of handling 50 million users simultaneously
   • Executes 50 million orders per day capacity
   • Customer-friendly UI/UX design optimized for first-time investors
   • Groww UPI, ORBIT, and Lite technologies for scalability
   • Mobile-first design catering to smartphone-driven India
   • Low-cost technology infrastructure enabling competitive pricing
5. Impressive Financial Turnaround & Profitability:
   • Loss of ₹805 crore (FY24) to profit of ₹1,824 crore (FY25) – remarkable turnaround
   • Revenue grew 49.5% YoY in FY25 (₹2,609 cr to ₹3,902 cr)
   • EBITDA margin of 46.7% in FY25
   • Q1 FY26: ₹904 crore revenue, ₹378 crore PAT (11.9% QoQ profit growth)
   • “Adjusted cost to operate” declined from 26.32% (FY23) to 13.77% (FY25) – operational leverage kicking in
   • Demonstrated path to sustainable profitability
6. Diversified Product Portfolio & Revenue Streams:
   • Beyond brokerage: Mutual funds, ETFs, IPOs, bonds, digital gold, U.S. stocks
   • NBFC subsidiary (Groww Creditserv) for credit products and personal loans
   • Margin Trading Facility (MTF) through Groww Invest Tech subsidiary
   • Asset management via Groww Mutual Fund
   • Reducing dependency on trading revenue (from 90% in Mar 2024 to ~80% in FY25)
   • Cross-selling opportunities across financial products
7. Deep Tier-2/Tier-3 Penetration:
   • 81% active users outside top-6 cities
   • Democratizing access to financial markets for smaller towns and villages
   • Addressing underserved market with simple, mobile-first approach
   • Regional language support and vernacular content
   • First-mover advantage in Bharat (non-metro India)
8. Young, Growing User Base:
   • 45% users below 30 years of age
   • 21% users between 31-35 years
   • Capturing millennials and Gen Z early in wealth-building journey
   • Lifetime value (LTV) potential as users age and accumulate assets
   • Digital-native cohort comfortable with app-based investing
9. Marquee Investor Backing:
   • Backed by Tiger Global, Peak XV Partners (formerly Sequoia India), Ribbit Capital, ICONIQ, GIC, Y Combinator
   • Credibility from institutional investors
   • Access to global best practices and strategic guidance
   • Strong corporate governance standards
10. Entrepreneurial Culture & Execution Excellence:

• Ownership-driven culture with lean team of 1,415 employees
• Fast decision-making and agile execution
• Continuous product innovation and feature launches
• Focus on customer experience and feedback loops
• Technology-first mindset permeating organization

Key Risks & Challenges

1. Extreme Dependence on Broking Revenue (84.50%):
   • Brokerage contributed 84.50% of total operating revenue in FY25
   • Highly vulnerable to decline in trading activity or volumes
   • Market downturns directly impact revenues and profitability
   • Customer preference shifts away from equity trading pose existential risk
   • Revenue concentration creates business model fragility
2. Market Volatility & Economic Sensitivity:
   • Business performance tied to capital market sentiment
   • Prolonged bear markets or economic downturns reduce trading volumes
   • Retail investor enthusiasm cyclical and sentiment-driven
   • FY24-FY25 benefited from bull market – sustainability untested in bear phase
   • Interest rate changes, inflation, and macro factors beyond company control
3. Intense Competition & Price Wars:
   • Competing with Zerodha (market leader by revenue), Angel One, Upstox, Paytm Money
   • Full-service brokers like ICICI Direct, HDFC Securities, Kotak still relevant
   • New entrants continuously emerging in discount broking space
   • Price-based competition compressing margins
   • Low differentiation in core brokerage services
   • Customer switching costs minimal – loyalty fragile
4. Regulatory Risk & Policy Changes:
   • Operates in highly regulated environment under SEBI oversight
   • Recent SEBI curbs on derivatives trading (Nov 2024) hit industry volumes
   • Changes in margin norms, leverage rules, and brokerage fee structures impact profitability
   • SEBI order (late 2024) threatening discount broking business model
   • Potential restrictions on MTF, credit products, or data monetization
   • Compliance costs increasing with evolving regulations
5. Technology & Cybersecurity Risks:
   • Continuous platform access critical – any downtime disrupts services and damages trust
   • System failures, outages, or technical glitches harm brand credibility
   • Cybersecurity breaches exposing customer financial data catastrophic
   • Competitors have faced scrutiny over tech-related glitches – precedent exists
   • Need for continuous investment in IT infrastructure and security
   • Cloud infrastructure dependency (investing ₹152.5 cr from IPO proceeds)
6. Slowing User Growth Momentum:
   • Net transacting users growth slowed to 760,000 in Q1 FY26 vs 1.67 million in Q1 FY25
   • Active user acquisition decelerating
   • Decline in active client base between February-August 2025 noted
   • Market penetration increasing – low-hanging fruit captured
   • Future growth requires converting non-investors – harder proposition
7. Short Operating History as Profitable Entity:
   • First major profit only in FY25 after years of losses
   • Profitability sustainability untested over business cycles
   • FY24 loss of ₹805 crore still recent memory
   • One-time tax expense from U.S. to India re-domiciliation distorted FY24 results
   • Track record of consistent profitability absent
8. Credit & Lending Business Risks:
   • Expanding into NBFC lending (₹205 cr IPO allocation) and MTF (₹167.5 cr)
   • Credit businesses bring regulatory oversight, capital requirements, and default risks
   • Personal loans and margin funding expose company to credit losses
   • Liquidity risks if unable to fund lending operations
   • Higher risk profile compared to pure brokerage model
   • Requires different skill sets and risk management capabilities
9. Large OFS (84%) – Investor Exit Signal:
   • ₹5,572.30 crore (84% of issue) goes to existing investors exiting
   • Only ₹1,060 crore (16%) fresh capital to company
   • Signals early-stage investors cashing out at peak valuations
   • Limited capital cushion for company growth relative to issue size
   • Insider selling raises questions about confidence in future growth
10. High Valuation – P/E ~40x:

• Trading at P/E of approximately 40x FY25 earnings
• Significantly higher than some traditional financial services companies
• Comparable to Angel One and global fintech peers
• Little room for execution errors or growth disappointments
• Future growth heavily priced in
• Downside risk if profitability falters or competition intensifies

11. Customer Acquisition Cost Pressures:

• Competition intensifying for new users
• Rising marketing and promotional expenses to attract customers
• Even with 83% organic acquisition, CAC trending upward industry-wide
• Need for continuous brand building and performance marketing (₹225 cr IPO allocation)
• Pressure to diversify beyond equity trading to justify customer investment

12. Operational & Execution Risks:

• Expanding into credit, MTF, mutual funds, wealth management requires different expertise
• Inorganic acquisitions planned (unidentified targets) – integration risks
• Managing rapid growth while maintaining service quality challenging
• Lean team of 1,415 may face scaling challenges
• Key person dependencies on founders and senior management

13. Low Retail Allocation (10%):

• Only 10% of IPO reserved for retail investors vs typical 35%
• Heavily skewed toward institutional investors (75% QIB)
• Retail demand may exceed supply causing allocation disappointment
• Less inclusive compared to other mainboard IPOs

Disclaimer: This information is based on publicly available sources including SEBI RHP filings and company disclosures. Investors should conduct their own research and consult with financial advisors before making investment decisions. Past performance is not indicative of future results. Grey Market Premium is unofficial and actual listing may vary.