Billionbrains Garage Ventures Share Price: Why Are Groww Shares Falling Today? 5 Reasons Explained

Billionbrains Garage Ventures Share Price: Groww made a bumper debut last week, but the sharp post-listing surge has now been followed by a steep correction in its valuation. The company's scrip was trading 7.79% lower at Rs 156 per share on the BSE at 11:30 am.

The new-age stock, which plunged nearly 10% to hit the lower circuit on Wednesday, is now once again hovering near the lower circuit level on Thursday. While the stock made a bumper listing last week and saw more than 50% jump in its valuation, the recent decline was the foreseen correction. For those tracking the Groww share price, here are the 5 main reasons behind the stock's decline on Thursday.

Groww Share Price Bumper Listing

Brand visibility and strong listing increased investors interest around Billionbrains Garage Ventures shares. Groww shares were listed at 12% premium, but the stock saw a sharp 30% jump in its valuation on the listing day. The bumper closing was enough to build a momentum that led to a sharp surge in the company's shares in the next few days.

"The recent two-day drop in Billionbrains Garage Ventures (parent of Groww) shares reflects a classic case of post-listing exuberance meeting reality. After the stock almost doubled within days of its IPO, the sharp correction was driven by profit-taking as early buyers locked in gains," explained Bhavik Joshi, Business Head, INVasset PMS.

Valuation Multiples

Although the company stands as one of the strongest among peers, the revenue growth has already begun to moderate, Joshi pointed. "The valuation multiples-already significantly higher than its peer broking firms-began to look less comfortable, prompting caution. Short-sellers and residual sellers may also have added to downward momentum, especially given the volume spike and lower liquidity," he added.

Pending 'Sell' Orders

The massive rally in Groww shares impacted the demand and supply equilibrium. On Wednesday. Nearly 1.65 crore Groww shares were marked with pending 'sell' orders, with no pending 'buy' orders on Wednesday, reported CNBC TV 18.

Over 30 lakh shares of Billionbrains were pushed into the auction window at NSE, reported Moneycontrol on Tuesday. The development came after traders who had shorted the stock in anticipation of price correction after post-listing rally could not arrange or the delivery of the shorted shares.

Upcoming Q2 Result

Another major reason behind the significant volatility in the Groww share price could be the upcoming quarterly result announcement by the company. Groww will announce its quarterly result on Friday, November 21.

Ending of Lock-In Period

The lock-in period of Groww shares may not have any direct impact on their performance on Thursday, but the phenomenon can significantly impact the prices on the day of expiry.

Groww's one-month shareholder lock-in will end on December 10. Nearly 149.2 million shares of the company will become eligible to be traded after the lock-in expiry, according to Nuvama Alternative and Quantitative Research.

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