Synopsis: Groww shares have soared nearly 90 percent above the IPO price and over 60 percent from the listing price in just days, but suddenly slipped into a 10 percent lower circuit today-what triggered it?
A sharp reversal hit the newly listed fintech stock today, as volatility finally caught up with the counter after its steep post listing surge. The sudden slide comes right after days of aggressive buying and extreme supply tightness, which had previously kept the stock locked in an upward trajectory.
Billionbrains Garage Ventures Ltd (Groww) opened at Rs. 188.58 against a previous close of Rs. 188.82 but quickly slipped to an intraday low of Rs. 169.94. This translates to a drop of roughly 10 percent, effectively hitting the lower circuit limit for the session. The company now holds a market cap of Rs. 1,04,914.10 crore.
What Caused The 10 Percent Lower Circuit?
The sharp fall appears tied to an unusual situation unfolding in the auction market. Following Groww’s explosive post-listing rally, an extraordinary 30.8 lakh shares moved into the auction segment on November 18, as per NSE data. This spike in auction volume was largely the result of short sellers getting trapped after failing to deliver shares during settlement.
With Groww having an extremely low free float of just about 7 percent, the number of shares available for normal trading is already limited. In such counters, even small short-selling positions or BTST (Buy Today, Sell Tomorrow) trades can lead to delivery failures when prices surge and stock availability tightens.
As traders struggled to source shares for settlement, the exchange marked these as short deliveries, pushing them into the auction market, where shares are bought at a premium to cover shortages, with the penalty passed on to the defaulting seller.
During the rally, many trapped short sellers reportedly rushed to cover positions at any price, adding to the runaway upside as they chased extremely limited supply. But today’s slide signals that the intense short-covering wave may have eased. With fewer forced buyers in the system and some traders taking profits after the sharp rally, a natural pullback finally set in, dragging the stock to its lower circuit.
Concerns Around Valuation
Another factor adding pressure is the growing discomfort around Groww’s valuation. The stock’s rapid post-listing jump has pushed its valuation far ahead of most established capital market firms, prompting questions about sustainability at these levels.
The company had a healthy market debut on November 12, opening on the BSE at Rs. 114 per share, about 14 percent above its IPO price. From there, the stock rallied sharply, climbing nearly 94 percent over the next five sessions to touch a peak of Rs. 193.91.
At the time of the IPO, Groww’s implied P/E was already estimated in the 33–37x range, higher than several long-standing industry players. After the recent run-up, the gap has widened even more: Groww currently trades at a lofty 61x P/E. In comparison, peers such as Motilal Oswal (29x), Angel One (33x), Nuvama Wealth (26x) and IIFL Wealth all sit at considerably lower multiples. This divergence has sparked discussions around valuation comfort, especially given the sector’s typical trading ranges.
Written by – Manan Gangwar
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