The four founders of Groww first met PeakXV in their Bengaluru office in 2018, leaving an initial impression of being understated and measured.

Seven years later, the team carried the same ethos while going for the IPO. Even though the Bengaluru-based fintech was the most profitable New Economy company of the country, it chose a “conservative valuation” of $7 billion or Rs 62,000 crore.

And it has delivered on listing day, and how!

Groww’s shares closed the market debut with a 31 percent gain compared to the IPO price band and a valuation of Rs 81,000 crore, as against the Rs 62,000 crore valuation it was seeking.

“Over multiple meetings, we began to develop an appreciation for the founders’ engineering, product, and growth skills; their strategic thinking; their quiet ambition; and their brilliant understanding of the customer,” wrote Ashish Agrawal in a blog post on PeakXV website.

PeakXV invested in the series B round in 2018 and also made follow-on investments in the company, and is the single largest shareholder with a 20 percent stake.

The pricing

Groww announced a price band of Rs 95–Rs 100. On November 12, its shares rose to Rs 134 before closing at Rs 131.

“You give some premium for leadership growth, and then you give a discount because you want to kind of create a win-win kind of situation,” Lalit Keshre, Groww cofounder and CEO told Moneycontrol in a recent interview.

As it turns out, it has been a win-win for the company and its investors on debut.

While some New Economy companies have seen a debate on the IPO pricing, Groww has escaped the conversation, owing to its fair pricing.

Behind the conservative valuation

One of the reasons behind Groww’s understated pricing was the concerns from some regarding the regulatory changes that impacted brokerage firms. Markets

“Investors felt that the company was getting valued fairly, if not conservatively. There were concerns in some quarters regarding the regulations and their impact, as some of its peers saw revenue or profits plummet in the range of 30-40 percent,” said Rishabh Katiyar, principal at Info Edge Ventures.

For most investors, Groww seemed like a company that was valued almost at par with peers and the premium could be attributed to the operational metrics.

Groww had higher EBITDA margins compared with a few peers – 60 percent versus 45 percent – and also had a much higher revenue and customer growth rate.