One of the most-watched startup IPOs finally hit the markets earlier this month when fintech major Groww made a strong listing, going live at INR 114 on the BSE, representing a 14% premium over its issue price of INR 100. On the NSE, the stock opened at INR 112, a 12% gain over the issue price.

What followed was nothing short of spectacular. Groww shares went on a blistering post-listing run, surging over 90% from the IPO price in days. But just as quickly as it rose, the stock cooled off. After a five-session rally that had nearly doubled the stock price, Groww ended the week at INR 157.9.

And hot on the heels of the IPO, the company also declared its first quarterly results since listing. For Q2 FY26, Groww reported a 12% rise in net profit to INR 471.3 Cr, compared to INR 420.2 Cr in the same quarter last year.

However, the topline told a slightly different story. Operating revenue fell 9.5% to INR 1,018.7 Cr from INR 1,125.3 Cr in Q2 FY25.

The company blamed the decline on the impact of true-to-label norms and tighter equity derivatives regulations introduced last year. And this is the reality check that those who invested in Groww have to contend with.

Market analysts believe the stock had simply run too hard, too fast. At one point, Groww’s market cap even briefly crossed that of the Bombay Stock Exchange, a move analysts now describe as a moment of “irrationality” being corrected.

While Groww keeps on posting stellar profitability and industry-leading margins, this set of earnings may not justify the rich post-listing valuation.

For now, the stock is trading at a premium multiple, well above what traditional brokerages command, and that’s exactly where the debate lies.

At the moment, the market is willing to pay for the scalability of the business model and long-run optionality, rather than its earnings profile. How long will this faith last?

From Trading App To Financial Super App

For years, Groww was seen as a clean alternative to traditional stockbrokers, friendly to beginners. It was the app college students used to make their first SIP. The platform young professionals turned to when they wanted a simpler alternative to demat-heavy incumbents.

But this image had to be shed before the IPO. Groww claims its users were fast maturing and therefore it too had to change into something much bigger: a full-stack financial ecosystem targeting the entire lifecycle of wealth.

This change can be seen in its product evolution: what started off with mutual funds and stocks has grown to include margin trading (MTF), commodity derivatives, credit products, bonds, ETFs, PMS, AIFs, and advisory services through its acquisition of Fisdom.

In its Q2 FY26 disclosure, the management made it clear that the vision was not quarterly........

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