grow on growth
In just three days of listing, BillionBrains Garage Ventures, the parent company of discount broking platform Groww, has delivered handsome profits to its investors, leaving those who did not get shares regretting it. Grow’s IPO shares were listed on the stock market on Wednesday, November 13 at a 14% higher price. Later it closed 30.94% higher at Rs 130.94, while its IPO price was Rs 100. Since listing, the stock reached Rs 153.50, a rise of more than 50%. Whereas, if we talk about Friday i.e. the last trading day of the week, the share price of Grow closed at Rs 148.41, 48% higher. However, from its high this stock has made investors a good amount of money. Now, what could be the future trend in this, so let us try to understand it through experts.
Grow’s business is strong, but experts believe that the sharp rise of the stock has made its price too high, which increases the possibility of further wrongdoing. Groww is India’s largest retail broker, which will have a major share of 26.3% in active customers by September 2025. The company’s growth from fiscal year 2021 to 2025 has been 101.7% annually, which is much higher than the industry’s growth of 27%.
Why are shares running away?
In a Mint report, Abhinav Tiwari, research analyst at Bonanza, said that his outlook is still positive due to strong data, fast user growth and best digital services. He says that Grow’s strength is its large young customer base, strong brand and digital platform. But they believe that without any new big news or a decline in the market, there is little chance of big profits in the near future. Vineet Bolinjkar, head of research at Ventura, also believes that instead of buying at this increased price, new investors should buy when the shares fall. He says that business is good but at such a high price there is less margin for error.
Experts say that at such a high price, the company’s future growth and profits are largely already embedded in the stock. Therefore, further returns will depend on how much the company innovates and how much it increases its stake. The main income of the company comes from brokerage, which keeps going up and down from time to time, hence, how much the company expands further in wealth management, commodity, margin trading etc. will be monitored.
What should investors do next?
Analysts believe that investors who have got good profits in IPO can secure profits by selling some stake. Bolingkar said that considering the sharp rise in the stock, it would be better for IPO investors to take profits by selling some of their holdings. This will give you the benefit of growth and the investment will remain intact for a long time. Grow IPO had received 17.60 times more bids on the last day. The company had raised about Rs 2,984 crore from anchor investors on November 3.