A Busy Week Ahead for India’s Primary Market: Nine IPOs Set to Launch
The Indian primary market is gearing up for an exciting week starting May 26, 2025, with a total of nine initial public offerings (IPOs) expected to hit Dalal Street. This surge includes four mainboard IPOs, marking a significant moment as it’s the first time this year that such a number of mainboard offerings will open in a single week. The last occurrence of this was back in December 2024, indicating a revitalization in market activity.
Market Sentiment on the Rise
The renewed enthusiasm in the primary market can be attributed to improved market sentiment that began in the second week of April. After a prolonged period of subdued activity since last October, easing global concerns—such as geopolitical tensions and trade wars—have contributed to a more optimistic outlook among investors. This positive shift is expected to bolster the upcoming IPOs, making them a focal point for market participants.
Spotlight on Groww
Among the IPOs generating significant buzz is Groww, a leading stockbroking and wealth management platform based in Bengaluru. The company has recently filed draft papers with the capital markets regulator for its much-anticipated IPO. Notably, Groww has chosen the confidential pre-filing route, a strategy gaining traction among startups and growth-stage companies seeking flexibility ahead of their public listings.
While specific details of the offering remain undisclosed due to this confidential approach, Groww plans to list its equity shares on both the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE).
IPO Valuation and Purpose
Financial media sources indicate that Groww is targeting a valuation between $7 billion and $8 billion, reflecting current market conditions. A potential equity dilution of 10-15% at this valuation would position the IPO size between $700 million and $920 million, making it one of the most closely watched IPOs in India’s fintech sector.
The funds raised from this IPO are earmarked for enhancing the company’s technological infrastructure and supporting its next phase of growth. Groww aims to invest in product innovation, platform upgrades, and broader business expansion to improve user experience and deepen market access.
From Underdog to Market Leader
Groww’s ascent in the competitive fintech landscape has been remarkable. The company has surpassed Zerodha to become the largest player by active client base, with its market share increasing from 20.9% to 26.3% in FY24. This growth underscores its transformation from a newcomer to a formidable market leader.
In stark contrast, Zerodha’s market share has slipped to 16%, highlighting the fierce competition in the sector. Groww added 3.4 million new active clients during FY25, bringing its total to 12.9 million, a staggering 35.5% year-on-year increase, the fastest among major players.
Challenges Facing IPOs
Despite its impressive growth, Groww’s IPO arrives at a challenging time for the broader broking industry, which is currently facing regulatory headwinds and declining investor sentiment. Recent regulations tightening retail futures and options (F&O) participation, along with increased transaction taxes and reduced exchange incentives, have adversely affected revenues across the sector.
In April 2025, Groww experienced a loss of approximately 75,000 active clients, a trend mirrored by competitors like Zerodha and Angel One. Angel One reported a 49% decline in net profit and a 22% drop in revenue for the March quarter, raising concerns about the topline performance of many brokers this year.
Strong Financial Growth Underpinning IPO Ambitions
Despite the challenging environment, Groww’s financial trajectory over recent years is noteworthy. The company achieved profitability in FY23, reporting a net profit of ₹4.5 billion on revenues of ₹12.8 billion. The following year saw even more rapid growth, with revenue more than doubling to ₹31.5 billion and operating profit reaching ₹5.4 billion.
However, it’s important to note that Groww reported a net loss of ₹8.1 billion in FY24, primarily due to a one-time tax impact of ₹13.4 billion linked to its corporate domicile shift to India. This loss should not be interpreted as a sign of distress; rather, the significant revenue growth illustrates the company’s rapid expansion.
Backed by Global Investors
Groww’s impressive growth story is further bolstered by backing from prominent global investors, including Peak XV Partners, Tiger Global, Ribbit Capital, and Microsoft CEO Satya Nadella. For its upcoming IPO, the company has enlisted a team of lead book-running managers, including JP Morgan India, Kotak Mahindra Capital, Citigroup Global Markets, Axis Capital, and Motilal Oswal.
Conclusion
The Indian fintech industry is projected to grow from approximately $110 billion in 2024 to around $420 billion by 2029, driven by the government’s push towards a digital economy and a young, tech-savvy population. As Dalal Street anticipates more fintech listings, Groww’s IPO will serve as a crucial litmus test for the sector. A successful launch could pave the way for similar growth-stage tech startups to pursue public offerings.
Investors are advised to conduct thorough due diligence into Groww’s financials and corporate governance practices to ensure that any investment aligns with their financial goals and risk tolerance.
Disclaimer: This article is for informational purposes only and should not be considered a stock recommendation. Investors should make their own decisions based on their specific objectives and after consulting independent advisors as necessary.