Should I invest in the Groww IPO or wait for a better entry after listing?
I’ve heard about the Groww IPO, and I’m confused about whether it’s worth applying for or not.
The company looks profitable and trusted, but the valuation seems very high compared to other brokers like Zerodha and Angel One.
Also, with SEBI’s new rules hurting the brokerage industry, I’m wondering if Groww’s growth can really continue at the same pace. The rule is that SEBI has restricted weekly expiry contracts in the F&O segment. SEBI has allowed only one benchmark index per exchange. It is also moving towards limiting multiple expiry days. All this is done to reduce speculative trading.
Amid all this SEBI policy control happening, my question is, should long-term investors enter now, or wait for a post-listing correction before buying?
SEBI’s new rules mainly target the F&O segment.
It does so by restricting weekly expiry contracts. Earlier, brokers could earn steady revenue as traders speculated across multiple expiry days each week.
Now, only one index per exchange can have weekly expiries. So what? This is reducing trading volumes and directly impacts the brokerage income that depends on transaction activity.
This has made things tougher for firms like Zerodha, Angel One, and Groww.
Groww, which earlier earned most of its money from active F&O traders, will likely see some pressure on this revenue stream. Even though the company has been growing fast and remains profitable, these regulatory changes could slow its momentum.
It might need to focus more on its mutual fund and SIP business to maintain growth (which is not as profitable as the F&O segment).
Hence, I think, while Groww’s business model is solid and trusted, SEBI’s new rules could make its future earnings less predictable in the short term.
Disclaimer: This content is for informational purposes only and should not be considered investment advice.
