Groww Shares Plummet 4% Amid Block Deal Expansion Approaching Rs 5,700 Crore

Groww Share Price Drops 4% Following Block Deal

Shares of Billionbrains Garage Ventures, the parent company of stock broker Groww, experienced a decline of over 4% on May 12 following a block deal that was upsized from its initial base size of around Rs 4,750 crore to around Rs 5,700 crore due to increased demand.

The block deal size was increased to Rs 5,700 crore and executed at Rs 180 per share, with a mix of sovereign wealth funds, global long only funds, mutual funds, and life insurance firms participating in the large block trade. At 11 am on May 12, Groww shares were trading 4.2% lower at Rs 185.38 apiece.

Groww's share price has seen significant growth over the past six months, increasing by more than 40%. The company's market capitalisation has surged to around Rs 1.25 lakh crore as of May 11, nearly doubling from its IPO valuation of Rs 62,000 crore. Groww reported a 122% year-on-year jump in fourth-quarter net profit to Rs 686 crore, with total income during the quarter rising 8% to Rs 1,536 crore.

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The expiry of the lock-in period for around 400 crore shares, accounting for nearly 65% of pre-IPO shareholder holdings, on May 12 may trigger increased volatility in the stock. These unlocked shares are valued at nearly Rs 80,000 crore and include roughly 7% held by promoters and the promoter group, although sources indicate that these shares are unlikely to be sold.

Under SEBI regulations, non-promoter pre-IPO shareholders are subject to a mandatory six-month lock-in period after a company’s stock market listing. As part of the IPO, investors including Peak XV Partners, YC Holdings, Ribbit Capital, Internet Fund, Kauffman Fellows Fund, Alkeon Capital Management, Propel Venture Partners, and Sequoia Capital Global sold 55.72 crore equity shares worth Rs 5,572.3 crore through the offer-for-sale route.