Despite 44% Gain Since IPO, Groww Shares See 5% Daily Dip Before Lock-in Period Ends

Despite 44% Gain Since IPO, Groww Shares See 5% Daily Dip Before Lock-in Period Ends

Groww shares dipped about 5% to around ₹144–145 on 9 December despite being up roughly 44% from the ₹100 IPO price, as investors braced for the 10 December expiry of a one-month lock-in that unlocks nearly ₹2,200–2,300 crore worth of shares for trading. The move erased some post-IPO froth after a stellar early rally but left the stock well above listing levels, reflecting classic supply overhang jitters in a low-float, high-momentum name.​

Lock-in Expiry Mechanics

The 10 December deadline ends the shortest lock-in tranche for about 14.92 crore shares (roughly 2% of equity), mainly held by certain pre-IPO or anchor investors, making them eligible to sell after 30 days post-listing. At recent prices, this block is valued at over ₹2,260 crore, swelling free float from a tight ~7% and often sparking pre-emptive selling as traders front-run potential supply.​

Longer lock-ins remain: 90 days for anchors (ending mid-February) and up to a year for promoters, so this is just the first wave, but history shows even partial unlocks can pressure newly listed stocks with recent big gains. Analysts note that actual selling volume depends on holder intent—many institutions may hold for growth—but the optics of increased float often dominate short-term sentiment.​

Post-IPO Rollercoaster

Groww (Billionbrains Garage Ventures) listed on 12 November at ~₹112 (12% above IPO), then rocketed nearly 94% to ₹193–194 in five sessions on euphoric retail and momentum buying. That peak implied a ~₹1.1 lakh crore market cap before corrections kicked in: 10% lower circuits, 18–25% pullbacks over sessions, and now this 5% dip amid lock-in fears.​

Net, the stock is still +44–47% over IPO and +25–30% above listing despite volatility, buoyed by strong fundamentals but vulnerable to event-driven swings in a low-float setup.​

Business Strengths Amid Valuation Debate

Groww's appeal lies in profitability rare for fintechs: FY25 revenue ~₹3,902 crore, net profit ~₹1,824 crore, with 50%+ active user CAGR and guided 25–30% revenue growth. Broking dominates (~80% revenue), but mutual funds, lending and payments add diversification, with asset-light scale supporting margins.​

Broker views call it "fairly priced" at IPO (~30–34x FY25 P/E) but now "premium" post-rally (PEG 1.3–1.6), leaving little margin for error on volumes, ARPU or regulation. Mehta Equities flagged ₹125–130 as medium-term fair value early on; current levels demand flawless execution.​

Key Risks Post-Expiry

• Supply pressure: If even 20–30% of unlocked shares trade, it could extend the dip amid thin liquidity.​

• Cyclical earnings: Broking ties to market AUM/volumes; a bull-run slowdown hits hard.​

• Competition/regulation: Zerodha, Upstox rivalry and SEBI scrutiny on fees could cap pricing power.​

• More unlocks: 90-day anchor expiry in February risks another wave.​

Factor	Bull Case	Bear Case	Sources
Lock-in Impact	Minimal selling; institutions hold for 25–30% growth. ​	Heavy supply erodes gains; float doubles pressure. ​	​
Valuation	PEG justifies premium on profitability, user growth. ​	Stretched at 1.3–1.6x; cycle risks de-rate to 20–25x P/E. ​	​
Performance YTD	+44% net despite volatility; strong fundamentals. ​	25–30% correction from peak signals froth unwind. ​	​
Next Catalysts	Q3 earnings beat, mutual fund AUM growth. ​	Market downturn hits broking volumes. ​