What is driving the conviction of Groww’s founders?

In a surprise twist that has set Dalal Street abuzz, the founders of Groww have decided not to sell a single share in the company's ₹6,632crore initial public offering (IPO) - a rare act of conviction in India's startup ecosystem, where most promoters cash out partially at listing.

- Mayur Bhalerao

After nearly two years of subdued primary-market activity, India's startup IPO cycle is turning again. Following the successful debut of Urban Company and the day-one oversubscription of the richly valued Lenskart offering, the spotlight now shifts to Bengaluru-based retail investment platform Groww, which is preparing to list under its parent entity, BillionBrains Garage Ventures Ltd.

The IPO opens on Tuesday and closes on Friday, with a price band of ₹95-₹100 per share. It comprises a fresh issue of₹1,060 crore and an offer for sale (OFS) of 557.2 million shares worth ₹5,572 crore.

The company plans to use the IPO proceeds to strengthen its cloud infrastructure (₹152.5 crore), for brand and performance marketing (₹225 crore), capital infusion into its nonbanking financial company Groww Creditserv (₹205 crore), funding margin-trading operations at Groww Invest Tech (₹167.5 crore), and for inorganic growth and general corporate purposes.

What makes this listing the major talking point is the promoters' decision to sit out the OFS entirely. Together, Groww's four co-foundersLalit Keshre, Harsh Jain, Ishan Bansal, and Neeraj Singh-hold about 26.6% stake. They were earlier expected to offload a million shares each, as indicated in the draft prospectus filed last month.