Online stock trading platform Groww has submitted an updated draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (Sebi) for an initial public offering (IPO) estimated to be around ₹7,000 crore. This IPO is structured to include a fresh capital raise of ₹1,060 crore, alongside a substantial offer for sale (OFS) component of ₹5,000-₹6,000 crore, through which early investors will divest their stakes.

The company's founders, who collectively hold 27.96% of Groww, have been registered as promoters and will be subject to a 20% lock-in period for one and a half years post-listing. While founders are offering to sell a minor fraction, approximately 0.07% of the total shares, the fresh capital is earmarked to bolster Groww's margin trade facility, expand its unsecured lending, and enhance its wealth management segment. Additionally, the company is open to exploring inorganic growth opportunities within these areas.

Notably, the size of Groww's IPO has been adjusted downwards from an initial projection of up to ₹8,300 crore. This reduction aligns with a broader trend seen among several IPO-bound companies, including HDB Financial, Ather Energy, and Bluestone, which have trimmed their offer-for-sale portions in recent months due to a crowded public listing pipeline, subdued investor sentiment, and lower-than-anticipated valuations.

In terms of strategic developments, Groww finalized a definitive agreement in May to acquire wealth-tech startup Fisdom for approximately $150 million in an all-cash transaction. Further demonstrating investor confidence, Viggo Investment Pte. Ltd., an investment vehicle of Singapore’s sovereign wealth fund GIC, sought approval from the Competition Commission of India (CCI) in July to acquire a 2.143% stake in Groww. Following this investment, Groww's valuation reportedly reached $7 billion. Prior to these developments, in October 2021, Groww had completed a $251 million Series E funding round, valuing the company at $3 billion. Cumulatively, Groww has raised a total of $393.3 million in funding to date.

Financially, Groww has exhibited strong growth, with its profit soaring more than threefold to ₹1,819 crore in FY25, a significant increase from ₹545 crore recorded in FY24. The Bengaluru-based startup also reported a substantial rise in revenue, reaching ₹4,056 crore in FY25, marking a 31% increase over the previous fiscal year. These figures underscore the company's robust operational and financial performance.

The updated DRHP filing follows Groww's initial submission of draft IPO papers on May 21. Companies pursuing this route are mandated to file an updated DRHP, reflecting any changes or additional information. Groww has engaged prominent financial institutions such as JPMorgan Chase & Co. and Kotak Mahindra Bank Ltd. as bankers for its IPO. In March, the company issued compulsorily convertible preference shares as bonus to existing investors, including Peak XV and Ribbit. Additionally, Groww completed the relocation of its parent entity, Groww Inc, from Delaware, US, to Bengaluru over two years, effectively establishing its primary Indian company, Billionbrains Garage Ventures, as the new parent firm. This move aligns with a broader trend, as seen with edtech company PhysicsWallah, which also filed an updated DRHP recently after Sebi requested modifications to its initial confidential filing.