Peak XV sold shares worth Rs 1,583 crore ($178 million) in the IPO’s offer-for-sale (OFS) component. It had deployed a total of $30-35 million in Groww, marking an over 50-fold gain on investment.
Other comparable investor holdings in tech IPOs at listing include Elevation Capital’s 15% stake in One97 Communications, which runs Paytm, Info Edge’s 12% ownership in Zomato, Prosus’ 23% stake in Swiggy, and SoftBank’s 13% stake in Lenskart, which listed on Monday.
The $1.6-billion position as of the Bengaluru-based startup’s share price on Wednesday is over twice the size of Peak XV’s $695-million Fund VI, from which the Series A investment in Groww was made in 2018.
Peak XV managing director Ashish Agrawal, who led the investment, won the Midas Touch Prize for Best Investor at The Economic Times Startup Awards this year.
Apart from the OFS, Peak XV hasn’t sold a single share in Groww till date.“I think there is tremendous growth potential going forward for Groww… This is just decade one in the life of the company. It hasn’t completed 10 years yet… I think it will compound over the next two to three decades. We hope to be partners with them for a long period of time,” Agrawal told ET on the sidelines of Groww’s listing ceremony in Mumbai.For comparison, Alibaba and Elevation Capital held stakes worth Rs 48,900 crore and Rs 26,400 crore, respectively, ahead of Paytm’s 2021 IPO, while Prosus’s shareholding in Swiggy was valued at about Rs 26,900 crore when the food and grocery delivery firm went public last year.
The stakes of these investors, however, have lost part of their worth following the listings of these companies as the stocks underperformed.
Groww’s stock ended trading 31% up from its IPO price of Rs 100 per share in Wednesday’s session. The listing pop sharply boosted the worth of stakes held by its founders and investors.
The combined 26.2% shareholding of founders Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal is now valued at over Rs 21,000 crore (over $2 billion).
Y Combinator, the Silicon Valley accelerator that backed Groww in its early days, also reaped rich rewards, with its 10% stake now valued at over Rs 8,000 crore.
“Many US LPs (limited partners) have asked me if Indian investments would ever make money,” former Y Combinator Continuity head and Avra Capital cofounder Anu Hariharan said on Thursday. “Ecosystems take time, but here’s Groww, returning capital many times over and returning at least two US funds fully and likely delivering one of the best IRRs (internal rates of return) of the decade.”
Hold or sell?
While Elevation Capital, currently the largest institutional shareholder in Paytm, saw massive erosion in the worth of its holding when the stock entered a freefall last year, internet company Sanjeev Bhikchandani-led InfoEdge reaped multibagger gains on food and grocery delivery firm Eternal (then Zomato).
Ravi Adusumalli-founded Elevation Capital currently holds 15% stake in Paytm, which is worth Rs 12,500 crore, but its value had dropped to a low of Rs 3,800 crore in February last year following the Reserve Bank of India’s action against the company that sent the stock tumbling to record lows.
InfoEdge, which seed-funded Zomato and invested a total of Rs 600-650 crore in the Gurgaon-based company, is today sitting on a stake worth nearly Rs 37,000 crore. At the time of Zomato’s IPO in July 2021, the Naukri parent’s position in Zomato was valued at Rs 9,500 crore. It had sold shares worth Rs 3,750 crore in the OFS.