Groww, backed by Satya Nadella, set to become first Indian startup to go public after U.S.-to-India move

Groww, the leading retail brokerage firm in India, is poised to make a significant mark in the public markets with a multi-billion-dollar initial public offering (IPO). This milestone comes just over a year after the company transitioned its corporate headquarters from Delaware back to India, positioning itself to potentially become the first Indian startup to go public in its home country following such a relocation. With backing from high-profile investors, including Microsoft CEO Satya Nadella, Y Combinator, Ribbit Capital, and Tiger Global, Groww’s IPO—anticipated later this year—will also serve as a major exit strategy for these global venture capitalists. According to the draft IPO documents filed earlier this week, these three investment firms plan to sell approximately 236 million shares, making up about 5.6% of Groww’s total equity. This share sale constitutes the largest single block of shares offered to the public, representing around 41% of the total shares available. The trend of Indian startups relocating their headquarters back to India is gaining traction, with notable companies like Pine Labs, Razorpay, Meesho, and Zepto making similar moves. Last year, Walmart-backed PhonePe shifted its base from Singapore to India, followed by Flipkart, which announced its headquarters move back to India earlier this year. Groww’s decision to shift its headquarters was a strategic one, costing around $159 million in taxes, enabling it to comply with local regulations and position itself for domestic stock listings. This shift is particularly timely, given the expanding base of retail investors in India and the rising demand for IPOs. The developments in India’s capital markets have made them increasingly appealing compared to international options. While U.S. investors plan to divest a substantial portion of their Groww holdings, the company's founders—Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal—are only selling about 4 million shares, which is a mere 0.7% of the total offering. This indicates their commitment to retaining their equity stake, contrasting sharply with the established investors utilizing this IPO as an exit opportunity. Groww is aiming to generate ₹10.6 billion (around $121 million) in new funding through the IPO, alongside a secondary sale of 574 million shares by existing shareholders, estimated to be priced between ₹5–6 billion (approximately $568–$682 million). The IPO is projected to value the Bengaluru-based company at roughly $9 billion. In the fiscal year ending March 31, Groww reported a total income of ₹40.6 billion (about $462 million), reflecting a remarkable 45% growth year-on-year. The company also recorded a profit after tax of ₹18.2 billion (approximately $208 million), a significant turnaround from the previous year’s net loss of about ₹8 billion (around $92 million), primarily due to expenses linked to its headquarters relocation. As of June, Groww boasted around 37.4 million individual demat accounts, capturing nearly 19% of India’s market share, and 12.6 million active clients on the National Stock Exchange, amounting to a 26% share. The platform also reported approximately 17 million active systematic investment plans (SIPs) and 9 million unique mutual fund investors, becoming the only investment app in India to exceed 100 million cumulative downloads. The IPO is being guided by a consortium of advisors including JPMorgan Chase, Kotak Mahindra Bank, Citigroup, Axis Bank, and Motilal Oswal Investment Advisors.