Shares of Billionbrains Garage Ventures, the parent company of the investment platform Groww, have continued their upward trajectory, jumping 6% on Tuesday. This surge extends the listing rally to an impressive 65% in just five sessions. The stock was trading at ₹185 in early trade on the NSE.
Groww's initial public offering (IPO) was priced at ₹100 per share, and the stock debuted on the NSE at ₹112, a 12% premium. The stock closed its first session at ₹128.85, marking a gain of 28.85%. The ₹6,632-crore IPO was oversubscribed 17 times, indicating strong investor interest.
Fueled by this ongoing rally, the market capitalization of Billionbrains Garage Ventures has crossed the ₹1 lakh crore mark. This milestone comes shortly after the company's stock market debut last week.
Analysts have observed the rapid increase in the stock price and are beginning to advise caution. Some suggest that the stock may be overbought, and new investors should consider waiting for potential dips before entering the market. Ravi Singh, chief research officer at MasterTrust, suggested that investors who want to book profits can do so. However, he also anticipates that the stock could rise another 15-17% from current levels in the next six months, even with potential short-term corrections.
Groww has witnessed substantial growth, with over 10 crore registered users and operations spanning 98% of India's pin codes. The company's user base has grown at a compound annual growth rate (CAGR) of 52.74%.
The company intends to utilize the proceeds from its IPO to invest in technology development and business expansion. Groww is focusing on expanding margin trade funding, commodities trading, and wealth management services. Despite recent regulatory changes, the company has demonstrated resilience, with a limited revenue decline in derivatives being offset by growth in non-derivatives revenue.
The question remains whether Groww can sustain its current rally or if a correction is on the horizon. The company's strong market position, expanding user base, and strategic focus on diverse financial services suggest potential for continued growth. However, investors should remain cautious and monitor market conditions closely. For those with a short-term investment strategy, booking profits may be a prudent move, while those with a long-term outlook may consider holding or waiting for potential dips to buy. Prashanth Tapse, Senior Vice President (Research) at Mehta Equities, views Groww as a strong long-term structural story and a potential proxy for India's expanding capital market participation and suggests investors treat it as a medium- to long-term investment opportunity.
