Shares of Billionbrains Garage Ventures Limited, the parent company of trading platform Groww, also saw a sharp fall on Thursday. The stock hit a lower circuit of 10% on Wednesday. It has fallen about 20% from its high. Investors fear further downside and are also trying to understand why the stock is falling so much. On Thursday, the stock closed 7.76% lower at ₹156.71 after falling 9% intraday. After hitting a record high, the stock declined for the second consecutive day. Some people are citing profit-booking as the reason for this decline.
Apart from this, another big reason is being said: A report says that more than 3 million shares of Groww went in the NSE auction window. This is because many traders had short-sold Groww’s shares in anticipation of a decline after the listing, and they were unable to arrange for the delivery of the shares in time. This increased the pressure.
Investors suffered huge losses
When Grow’s shares reached a record high on November 18, its market capitalization was close to ₹1.19 lakh crore. But, today its market capitalization fell to ₹1.04 lakh crore. This means market capitalization declined by ₹19,000 crore, or investors lost ₹19,000 crore.
What should investors do?
Sunny Aggarwal of SBI Securities says that today’s fall seems to be profit-booking after the post-listing rally. Risks remain, and investors should wait more before buying shares. They should also keep an eye on the upcoming quarterly results.
This fear is looming over Groww
On December 10, Groww will complete one month of listing, after which the shareholder lock-in period will end, leading to more shares coming into the market. According to a report by Nuwama Alternative and Quantitative Research, after the lock-in period ends, 149.2 million shares, or 2% of the company’s outstanding equity, will become tradable.
Money doubles in 5 days
Grow has almost doubled investors’ money from its IPO price. The stock was released at ₹100, but since then, it has risen steadily, rising 93% to ₹193, its record high. However, it has been falling for the last two days.
Market participants are keeping a close eye on Gro’s upcoming key developments. The company will announce its first quarterly results after the listing on Friday, November 21, which is expected to provide information about the company’s financial performance.
