Source: BS
Context:
Investment platform Groww has received approval from the Securities and Exchange Board of India (SEBI) to launch its Initial Public Offering (IPO). This will be the largest fund-raise by an Indian capital market firm through the primary market.
What is an IPO?
- IPO (Initial Public Offering):
- The process through which a private company offers its shares to the public for the first time and becomes a listed company on a stock exchange.
- It allows companies to raise funds for expansion, debt repayment, acquisitions, or growth.
- Investors, in turn, get an opportunity to own a stake in the company.
Eligibility Criteria for a Company to Launch IPO in India (SEBI Guidelines)
A company must meet SEBI’s ICDR Regulations (Issue of Capital and Disclosure Requirements):
- Net Tangible Assets: At least ₹3 crore in each of the past 3 years.
- Profitability: At least ₹15 crore aggregate pre-tax profit in the last 3 years.
- Net Worth: Minimum ₹1 crore in each of the past 3 years.
- Post-Issue Capital: The company must issue at least 25% of shares to the public (for companies with market cap < ₹4,000 crore).
- Other routes: Companies not meeting profitability criteria may come via QIB (Qualified Institutional Buyers) route with additional conditions.
About Groww
- Founded: 2016 (by ex-Flipkart employees Lalit Keshre, Harsh Jain, Neeraj Singh, and Ishan Bansal).
- Headquarters: Bengaluru, India.
- Services Offered:
- Mutual fund investments
- Stock broking (equity & derivatives)
- IPO applications
- Digital gold, US stocks, fixed deposits, ETFs
- Customer Base: Over 35 million registered users.
- Significance: One of India’s fastest-growing fintech platforms democratizing investment for millennials and first-time investors.
