Groww Shares Plunge 10.5% Amid Block Deal Activity
Groww shares tank 11% in trade; 24.7 million shares change hands on BSE
Business Standard
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Shares of Groww's parent company, Billionbrains Garage Ventures, fell by 10.5% to an intra-day low of ₹182 on the Bombay Stock Exchange (BSE) due to a significant block deal involving private equity investors. Despite a slight recovery, analysts maintain a cautious outlook on the stock's valuation amid strong growth indicators.
- 01Groww shares dropped 10.5% to ₹182 during trading.
- 02A block deal involving 268.4 million shares is expected to raise up to ₹4,750 crore.
- 03The company reported a two-fold increase in profit after tax to ₹686 crore in Q4.
- 04Analysts project 54% EPS growth for FY27 but caution on high valuations.
- 05Total income surged 81% year-on-year to ₹1,536 crore.
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Shares of Billionbrains Garage Ventures, the parent company of Groww, experienced a significant drop of 10.5%, reaching an intra-day low of ₹182 on the Bombay Stock Exchange (BSE). This decline occurred amid heavy trading volumes, with 24.7 million shares changing hands on the BSE and 426 million shares traded on the National Stock Exchange (NSE). The drop is attributed to a block deal involving major private equity investors, including Peak XV Partners, Sequoia Capital, and Ribbit Capital, who are expected to offload holdings worth up to ₹4,750 crore. The proposed transaction will involve the sale of approximately 268.4 million shares, accounting for nearly 4.3% of the company’s total outstanding equity, with a floor price set at ₹177 per share.
Despite the drop in share price, Groww reported impressive financial results for Q4, with profit after tax more than doubling to ₹686 crore, compared to ₹309 crore a year earlier. The company's total income also surged by 81% year-on-year to ₹1,536 crore. Analysts remain optimistic about Groww's long-term growth potential, highlighting strong trading activity and expansion in margin trading facilities. However, they express concerns over high valuations, projecting 54% earnings per share (EPS) growth for FY27 and 30% for FY28, while maintaining a cautious 'sell' rating due to current valuations being ahead of sustainable revenue growth.
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Investors in Groww may see fluctuations in their portfolio value due to the significant drop in share prices and ongoing block deals.
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