Billionbrains Garage Ventures, the owner of India’s largest brokerage platform Groww, is planning to raise Rs 6,630 crore through an initial public offering (IPO). The company on thursday fixed a price band of Rs 95-100 per share, targeting valuation of over Rs 61,700 crore
The issue will comprise of a fresh issue of 106 million equity shares aggregating to Rs1,060 crore and an offer for sale (OFS) of 557.2 million equity shares, aggregating to Rs 5,572.3 crore.
Some of the investors participating in the OFS include Peak VI Partners Investments, YC Holdings II, Ribbit Capital V, GW-E Ribbit Opportunity V, Internet Fund VI, Kauffman Fellows Fund and Sequoia Capital Global Growth Fund III. Microsoft CEO Satya Nadella is also an investor.
Post-IPO, the growth focus will be in wealth, loan against shares (LAS) and commodity trading. Groww will also partner with banks for LAS.
The issuance will be the largest ever for a brokerage in Indian capital markets, with estimated valuation of the firm at around ₹62,000 crore. This is slightly above the market capital of approximately ₹61,000 crore for Motilal Oswal, currently the largest publicly traded brokerage. Nuvama has a market cap of approximately ₹26,000 crore, and Angel One Rs 23,000 crore.
The firm will list on the NSE and BSE, after closing anchor investments on November 3, and public bids on November 7. Two other unicorns – Pine Labs and Physics Wallah – are also planning their IPO announcements next week.
The funds raised will primarily be used for technology upgrades, branding and margin financing, Lalit Keshre, Groww’s co-founder and CEO, told FE.
Expansion in wealth management to serve captive high-rich clients is a priority, along with larger operations in commodities.
“Our costs are low, since we are techies and everything is done in-house. As a matter of principle, we do not indulge in nuanced investment activities like some of our peers,” said Groww founders.
Groww was founded by four former Flipkart executives – Lalit Keshre, Harsh Jain, Ishan Bansal and Neeraj Singh. The four co-founders hold 1,630 million shares, representing 26.64% of Groww’s equity on a fully-diluted basis, as per the DRHP. Based on the upper end of the price band, their combined holding is now valued at a whopping Rs 16,315.6 crore.
Last November, Groww re-domiciled from the US to India to pursue listing on domestic stock exchanges. Initial estimates had valuation of $10 billion. It has since fallen in sync with markets.
JPMorgan Chase, Kotak Mahindra Capital, Citigroup, Axis Bank, and Motilal Oswal Investment Advisors are managing the issue. Investment bankers from JP Morgan and Kotak said the issue was conservatively priced and the long-term value profile is quite strong.
Amid a record month for IPO, which saw large floats, including Tata Capital, LG Electronics India and Lenskart, investment bankers said November and December will be busy too as the pipeline remains strong.
The ₹ 7,278-crore fundraise of Lenskart will close for public bids on November 4.