The Groww share price continues to be focus. After listing at a 12% premium to the issue price, the shares rallied as much as 94% from the issue price. However, soon after that the tide turned. The stock has now seen two straight days of steep losses, raising questions about what exactly triggered this sudden reversal.
Groww: A sharp fall after a fast rally
The share price of Billionbrains Garage Ventures (Groww parent firm) slipped nearly 9% in the early trade session today. The price fell to Rs 154.10 on the National Stock Exchange (NSE), continuing the selling pressure that began a day earlier.
The company’s market capitalisation (total value of all its shares) is now around Rs 97,432 crore, dropping below the Rs 1 lakh crore level.
This follows Wednesday’s 10 percent drop, when the stock hit its lower circuit limit, the maximum fall allowed in a day.
From a dream start to a sudden pause
Groww made a strong entry into the stock market on November 12. It is listed at Rs 112, slightly above its issue price of Rs 100. Over the next four sessions, the stock soared to Rs 193.80. This is almost double the IPO price.
But such quick jumps often attract short-term traders who book profits at the first sign of cooling. That is exactly what seems to have happened now. The earlier momentum has slowed, and investors who bought at lower levels are booking gains.
What next for investors: Analysts weigh in possibilities
With Groww shares slipping sharply after a strong debut, the conversation has now shifted from excitement to valuations. Market experts believe the stock’s recent swings are not just about profit-booking but also about whether the price truly reflects the company’s worth.
Market veteran Arun Kejriwal summed up the changing mood, saying the early excitement can only take a stock so far. “But now questions are being raised about valuation. So if you want to continue the good times, valuation has to be given a thought.”
Market veteran Ambareesh Baliga in an earlier conversation with FinancialExpress.com, pointed out that the real test will begin once locked-in investors start getting access to their shares. He said, “The real thing you will see once the anchor book opens up in a month. And in the next six months, when a huge number of people have bought the shares before listing. I mean, a lot of investors have bought at much higher levels. I think the last deal that happened was around level Rs 135 (higher than the issue price). So there would be selling coming in from all these people going ahead,” adding that a correction looks likely.
Baliga also noted that Groww’s current pricing leaves little room for comfort. “Valuations are anyway expensive, so I expect it to correct. Today, anyway, because of the restrictions, it has been corrected. But this is more technical. But fundamentally too, if you compare with any other player in the market.”
Ajit Mishra, Senior Vice President of Research at Religare Broking, cautioned against chasing momentum without a plan. He said investors should avoid entering a stock only because it is rising or falling. According to him, “investors are advised not to jump into any stock just because it’s trading in positive or negative territory..”
Groww: Waiting for Q2 numbers
Another factor weighing on sentiment is the upcoming financial results. Groww has not yet announced its quarterly earnings, and the company is scheduled to release its numbers on November 21.
IPO enthusiasm
Groww’s initial public offering (IPO) had received strong interest, with the offer subscribed 17.60 times earlier this month. The excitement carried into the listing week, which partly explains the sharp jump in the first few days.