Groww Share Price Falls 5% as JM Financial Initiates Coverage with ‘Sell’ Rating
Groww share price fell as much as 4.87 per cent to ₹164.5 per share on the National Stock Exchange (NSE) on Monday, after JM Financial initiated coverage with a ‘Sell’ rating, projecting a 13.5-per cent downside.
Why Did Groww Share Price Fall Today?
The brokerage believes that the Reserve Bank of India’s updated Capital Market Exposure (CME) norms will significantly tighten the credit environment for stock brokers, leading to increased trading costs. This, combined with a 100 per cent collateral requirement for funding and a 40 per cent haircut on shares for collateral value calculations, weighed on the sentiment for Groww stock.
Furthermore, JM Financial expects that over 80 per cent of Groww’s revenue will continue to come from the broking business till the financial year 2028, with lending and wealth management businesses contributing less than 20 per cent to the revenue. This raises concerns about the company’s ability to offset any sharp cyclical or regulatory-action-led downturn in its core broking business.
What Does This Mean for Indian Investors?
For Indian investors, this development is a reminder of the importance of stock market news and analysis in making informed investment decisions. It also highlights the need to stay up-to-date with the latest developments in the Indian stock market, including Nifty 50 and Sensex movements.
JM Financial’s Outlook on Groww
JM Financial estimates that Groww will likely report 45 per cent profit after tax (PAT) and 34 per cent revenue compound annual growth rate (CAGR) over the financial years 2026 and 2028. However, the brokerage values Groww one standard deviation (1SD) above Angel One’s historical price-to-earnings (PE), at 21 times financial year 2028 earnings-per-share (EPS) estimates of ₹7.
The brokerage also notes that the ability of Billionbrains Garage Ventures’ management to expand remains untested, and that the company’s ability to integrate Fisdom and other potential partners as it scales its lending and wealth/asset management businesses remains a key risk.
Conclusion
In conclusion, the fall in Groww share price on Monday serves as a reminder of the importance of staying informed and up-to-date with the latest developments in the Indian stock market. For more information on Indian stock market news and analysis, please visit our website.