MUMBAI: Four early investors in Billionbrains Garage Ventures, which operates the leading fintech platform Groww, are collectively selling a 4.3% stake valued at approximately $500 million (close to Rs 4,800 crore) in the recently-listed company. The selling shareholders—Peak XV, Sequoia, Y Combinator, and Ribbit—have mandated Kotak Securities and JP Morgan India to execute the sale through block deals on Tuesday.
Details of the Stake Sale
The four selling shareholders, all prominent private equity firms, are together divesting a little over 26.8 crore shares of Groww, representing 4.3% of the fintech major's equity capital, according to the term sheet for the deal. The floor price for the offer is set at Rs 177 per share, reflecting an 8.5% discount to Groww's closing price of Rs 193.5 on the NSE on Monday. The base offer size is valued at Rs 4,750 crore at the floor price, with an upsize option for additional sale through this deal, as per the term sheet.
Lock-in Expiry and Market Impact
According to a report by Nuvama Alternative & Quantitative Research, the lock-in period for shareholders who held shares before the company went public is set to end on May 12. The total number of Groww shares from which the lock-in will be lifted is 418.2 crore, worth nearly Rs 81,000 crore at current prices. Under Sebi regulations, pre-IPO shareholders are subject to a lock-in period to limit any pressure on the stock price from an oversupply of shares following a recent listing.
Other prominent recently-listed companies where lock-in for pre-IPO shareholders is ending soon include Meesho (308.3 crore shares on June 10), Pine Labs (92.4 crore shares on May 13), and Physicswallah (25.9 crore shares on May 18).
