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Will Groww IPO’s High OFS Portion Be A Concern For Retail Investors?

15 19
19.09.2025

Groww, India’s largest retail brokerage in terms of active investors, is all set for another mega new-age tech IPO after the huge gains seen by Urban Company earlier this week.

The fintech giant aiming to mop up nearly INR 7,000 Cr from the public market at a valuation of $7-8 Bn.

Groww is believed to have democratised wealth creation by bringing millions of India’s young digitally native users to the wealthtech space along with Zerodha.

While bootstrapped Zerodha has not outlined any plans to go public, Groww, founded by Lalit Keshre, Harsh Jain, Ishan Bansal, and Neeraj Singh – all former Flipkart executives – raised nearly $600 Mn so far from investors like Y Combinator, Peak XV Partners, Ribbit Capital and Tiger Global.

In fact, Groww will be the first Y Combinator portfolio company to go for an IPO on the Indian stock exchanges among the new-age firms.

Set up in 2016, the fintech company has scaled rapidly to reach a monthly active user (MAU) base of 18.07 Mn as of the first quarter of FY26, cornering a 25% market share in the NSE’s retail segment, according to its IPO documents.

The INR 7,000 Cr IPO will comprise fresh issues of INR 1,060 Cr and an offer-for-sale (OFS) component of up to 574.19 Mn shares, making up 82.5-85% of the issue size. The company had first filed for an IPO in May through the confidential route and it is unclear if OFS had a big share in it, but called it off because of a downturn in the market and a lower valuation.

Groww’s DRHP throws up a tale of explosive growth. Its revenue from operations surged 49.5% to INR 3,901.72 Cr in FY25 from INR 2,609.28 Cr a year ago and flipped an INR 805.45 Cr loss into an INR 1,824.37 Cr profit in FY25.

Yet, its issue structure reflects the oft-repeated narrative in new-age company listings, where the OFS component is more than 50-60% of the overall issue size. This helps early investors reap massive rewards, leaving a modest share of the capital for the company.

As Inc42 looked deeper into the DRHP, it was found that the major investors would garner nearly INR 4,103 Cr if Groww lists even without any change in its last reported public valuation of $7 Bn.

While the IPO promises substantial exits for VCs, the founders will sell only a token 4 Mn shares that will fetch them INR 40 Cr. CEO Lalit Keshre and his fellow founders were given INR 614 Cr as performance-based incentives in FY25, shows the DRHP.

But, as retail investors scrutinise the filing, the question lingers: Will the heavy VC cashout erode trust, or will Groww’s growth story win them over?

VC Bonanza: Cashouts Beat........

© Inc42