Groww shares surge as much as 21% on debut for market cap of over ₹70,000 crore

Groww has a P/E valuation higher than those of Angel One and Motilal Oswal, but that's seen as difficult to sustain amid competition from Zerodha and Upstox.

Groww parent Billionaires Garage Ventures Ltd. has listed at a premium. That gave India's largest online broker a market capitalisation of more than ₹70,000 crore.

The ₹6,630-crore Groww IPO was subscribed more than 17 times. (AI Image)

Groww's share price rose as much as 21% over the IPO price of ₹100 to ₹120.50 on the BSE even as the benchmark Sensex traded half-a-percent up. That, after the ₹6,630-crore Groww IPO was subscribed more than 17 times.

The listing comes in the wake of a volatile opening day for Lenskart Solutions Ltd., which had triggered a debate about lofty valuations. Groww’s debut may help ease concerns that the nation’s hot IPO market is set to slow down after some recent mixed debuts.

At the IPO price of ₹100/share, Groww had a price-to-earnings ratio of 34, meaning the company wants investors to pay ₹34 for every rupee it earns. That's higher than that of rivals such as Angel One Ltd. and Motilal Oswal Financial Services Ltd., which are trading at P/E multiples of 20 and 27, respectively.

Ahead of the listing, analysts at Anand Rathi Share and Stock Brokers Ltd. said that the Groww IPO appeared “fully priced”, while Chola Securities Ltd. warned that the high valuation may be difficult to sustain given competition from the likes of Zerodha, Upstox and Angel One.

Still, brokerages such as SBI Securities Co. recommended the offering, citing Groww’s strong digital reach, diverse products, and large user base.