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Groww’s valuation falls below $2 billion due to domicile shift back to India
21 Nov 2024, 06:44 PMIf a report is to be believed then Razorpay - which is also planning to move its domicile to India - may see a similar 30-40% cut in fair market value.
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Stockbroking platform Groww -- which recently moved its domicile from the US back to India -- saw its fair market valuation being reduced to under $2 billion, down from its previous $3 billion.
The Bengaluru-based company paid Rs 1,340 crore ($160 million) in taxes to the US government during the process of bringing back its parent entity to India, based on this new valuation, according to ET report.
The company was last valued at $3 billion during its last funding round in 2021. It raised $251 million in Series E round led by ICONIQ Growth along with investors including Alkeon, Lone Pine Capital and Steadfast.
Groww's revenue from operations surged to Rs 3,145 crore in FY24, up from Rs 1,435 crore in FY23. The stockbroking platform reported a net loss of Rs 805 crore in FY24, largely due to a one-time tax payment of Rs 1,340 crore for relocating its domicile to India. Despite this, the company remained operationally profitable, with profits of Rs 535 crore in FY24 compared to Rs 458 crore in FY23.
If the report is to be believed then Razorpay -- which is also planning to move its domicile to India -- may see a similar 30-40% cut in fair market value.
The Sequoia-backed digital payments company, which was last valued at $7.5 billion, is working with consulting firm Deloitte on the matter.
For fintechs, stricter licensing rules are a bigger reason to move to India than IPO-related goals. However, the move can be very expensive—costing between $700 million and $1 billion. The cost is shared between the company and its investors, a fintech founder, considering to move its entity back to India, told me last year.
For example: PhonePe moved quickly but spent more. It paid a nearly $1 billion tax bill to the Indian government after moving its headquarters from Singapore to India. However, "slower processes that take up to two years can save $100–200 million," the fintech founder had then added.
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