Fintech company Groww listed on the Bombay Stock Exchange on a positive note – the company’s stock listed at 14 per cent of a premium of its IPO price. During intra-day trading, it hit a peak of Rs 124 – a 24% gain on the share price, leading market pundits to even gloat that this could be a turning point in Indian middle-class engagement with the money markets.
So what makes what is essentially an app-based business in stock trading, itself roar off to a big bang start on the very markets it helped others start trading?
In a lot of ways, it has something to do with its history. Started by a bunch of former executives from the e-commerce major Flipkart (they jokingly refer to themselves as the ‘Flipkart mafia!’) back in 2016, it was a unique perfect storm – economic slowdown, a global pandemic and lockdown-fuelled uncertainty, that helped the company hit its sweet-spot.
“The economic uncertainty due to Covid nudged millions of Indians to re-look at how they managed their money,” Lalit Keshre, co-founder and CEO of Groww, had told THE WEEK in an interview back in 2021, when the Covid boom prompted millions of Indians to start trading online. It was a wave that platforms like Zerodha, CRED, and Groww took advantage of spectacularly.
Groww had hit the market, projecting itself as a do-it-yourself investment platform, helping its predominantly young user base initially invest in mutual funds directly without the help of brokers, before expanding into the stock arena, where it struck gold. “The process of investing in financial products in India was too opaque and complex. We brought an e-commerce-like simplicity and choice to the investing experience of Indians,” he added.
The results were quick and astounding. The immense digital-first growth in those heady days of the pandemic saw immense investor interest, with the company soon entering the unicorn club, a term given to new-age tech-focused startup businesses that gain a market valuation of one billion dollars (in today’s terms, that would mean an estimated worth of just short of Rs 9,000 crore).
While those were heady days – Indian startups were being adjudged sky high valuations and attracted very, very loosened purse strings when it came to venture capitalists and institutional investors, but while some of them ran into turbulence soon enough, Groww’s real success has been in the steady way the business built upon this windfall, without going full throttle and exposing its flanks to the kind of dangers that fellow unicorners like Byju’s landed themselves in.
The Bengaluru firm never lost sight of its vision. “We have made good progress, but it feels (like) we just got started,” Keshre had said in April 2021 when the startup was adjudged a unicorn.
The company steadfastly remained focused on its primary objective, that is to simplify financial investment for the next million (and more) of ordinary Indians who had the disposable income to invest, but were hesitating because of the pain points. Even after getting flush with cash and being adjudged a unicorn, its founders did not get on a spending spree; instead, they decided to focus judiciously on growing the business.
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And that paid dividend – for example, just six months after being valued at one billion dollars and being adjudged a unicorn, its next round of funding saw it being valued at three times that.
Even the IPO last week grabbed headlines with the kind of interest from both big institutional investors and ordinary citizens who dabbled in shares. The result was incredible – the IPO was oversubscribed, and the stock’s debut on the markets today was even better than expected – 14 per cent higher on BSE and 12 per cent higher on the NSE. During intra-day trading, it peaked at Rs 124 – not bad for a company that is not even ten years old. Yet, for all the achievements of the past few days, their biggest achievement would still be the manner in which it spearheaded the democratisation of financial services, spurring hundreds of thousands of ordinary Indians to go forth, invest and unlock the value of their savings.