CCI clears Groww’s shareholder restructuring as founders surrender special voting privileges
The approval allows certain shareholders to acquire additional voting rights and authorises the issuance of bonus compulsorily convertible preference shares to all existing equity shareholders of Groww.
The Competition Commission of India (CCI) has approved a significant restructuring move involving Billionbrains Garage Ventures Private Limited, better known as Groww.
The approval allows certain shareholders to acquire additional voting rights and authorises the issuance of bonus compulsorily convertible preference shares to all existing equity shareholders of Groww.
The restructuring involves the collapse of differential voting rights held by Groww's founders. This means that the founders are giving up their special voting privileges to exert greater control over the company despite potentially holding a smaller percentage of the total equity.
Companies often issue shares with differential voting rights to ensure founders or promoters retain control over strategic decisions even if their equity stake gets diluted due to new investments.
Bonus compulsorily convertible preference shares will be issued to prominent investors, including Peak XV Partners, Ribbit Capital, Y Combinator (YC), Tiger Global, and ICONIQ Strategic Partners.
In preparation for its public debut, Groww is reportedly in discussions to raise approximately $200 million in pre-IPO financing, aiming for a valuation of around $6.5 billion. Potential investors include Singapore's sovereign wealth fund GIC and existing backer Tiger Global, according to The Economic Times.
The company plans to file its draft red herring prospectus by April, targeting an IPO that could raise up to $1 billion and value the firm at $10 billion. Groww has engaged five leading banks to facilitate the offering, with a listing anticipated in the 2025-2026 financial year.
Groww reported a consolidated revenue of Rs 3,145 crore for the fiscal year ending March 31, 2024 (FY23-24), marking a 119% growth compared to Rs 1,435 crore in FY22-23.
The Bengaluru-based company's operational profitability also improved to Rs 535 crore for FY24, up from Rs 458 crore in the previous year. However, the stock-broking firm reported a net loss of Rs 805 crore for FY24, primarily due to a one-time tax expense of Rs 1,340 crore related to the company's recent move to domicile in India.
Groww Invest Tech Private Limited, the fintech firm's brokerage arm, saw its net operating income more than double to Rs 2,900 crore in FY24, while PAT grew 4X to Rs 297.8 crore.
In pic: Lalit Keshre, CEO and Co-founder, Groww
Edited by Swetha Kannan