Scarcity Sparks a Scramble: Groww Market Cap Rockets Past BSE
In a remarkable market phenomenon, digital investment platform Groww has achieved a unique feat: its market value has surpassed that of one of the exchanges it is listed on, the BSE. This surge makes Groww the only broker to hold this distinction, with its market capitalization catapulting from Rs 0.7 trillion at listing to Rs 1.166 trillion on Tuesday—approximately Rs 12 billion above the BSE’s Rs 1.154 trillion.
The stock was listed on both BSE and NSE last Wednesday. The other exchange, the National Stock Exchange (NSE), is not listed.
The Mechanics of the Surge: Short Squeezes and Scarcity
Brokers tracking the counter attribute the sharp rise in Groww’s market capitalization primarily to a series of short squeezes caused by soaring demand and extremely low trading float.
A short squeeze occurs when ‘bears’ (traders who sold shares they didn’t own, expecting the price to fall) are forced to close out their sell positions by buying the shares back at higher levels. This mandatory buying drives prices even higher.
Imagine a trader sells a stock intraday at Rs 100. If they cannot source the shares at that price for delivery by the end of the session, they may be forced to buy it at a higher price, say Rs 110, resulting in a loss. This mechanism directly contributes to the upward pressure on the stock.
The tight supply was evident in an auction held by NSE for 3.08 million shares on Tuesday. These shares were needed for delivery by traders who had shorted the stock last week but failed to source the shares.
$\rightarrow$ The Tight Trading Float
Despite a seemingly high public shareholding of 72.19%, only about 11% of Groww’s shares are freely available for trading.
| Investor Group | Public Holding | Trading Behavior |
| Foreign Investors | 57.15% | Typically don’t sell often. |
| Mutual Funds | 4.06% | Typically don’t sell often. |
| Promoters | 27.81% | Locked in. |
This limited supply is fueling the scramble. As one broker noted, “Traders selling the shares can get trapped by bidders fully aware of the prevailing tight supply, forcing the former to square off at higher prices.”
Valuation and Outlook: A Consumer Tech View
The price movement is stark: Groww’s stock has climbed 44% since closing on its listing day. On Tuesday, it surged 8.04% to Rs 188.82, while the benchmark BSE Sensex fell 0.33%.
The high demand is reflected in robust delivery volumes of 30% of traded volumes, compared to its closest listed peer Angel One’s delivery ratio of just 12%.
Independent market analyst Ambareesh Baliga stated that “Valuations look absurd currently, and prices will moderate once the anchor lock-in ends.”
The stock currently trades at a pricey 59 times its price-to-earnings multiple, against Angel One’s 33 times.
The anchor investor lock-in for half of the 298.4 million shares portion will end on 10 December, which is expected to ease the share supply pressure.
Groww, despite being the country’s largest brokerage by clients (12 million users vs. Zerodha’s 7 million and Angel One’s 6.85 million), posted a lower net profit of Rs 1,824 crore in FY25, compared to Zerodha’s Rs 4,200 crore.
Analysts remain optimistic, attributing the surge to strong fundamentals and a strategic shift in perception.
“Markets are now viewing Groww not just as a broking firm, but as a consumer tech company with exponential growth potential,” said Shripal Shah, MD & CEO of Kotak Securities. “This shift is resulting in strong demand at the counter.”
Groww is slated to release its September quarter results this Friday, which could be the next catalyst for share price movement.
Explore Investment Strategies
For deeper understanding of market mechanics, short selling, and investment strategies, explore perspectives from Ranjit Jha (CEO)—known for research-driven, long-term financial analysis.
To explore how Rurash Financials supports investors with fixed-income strategies, market research, and wealth solutions, visit the official website.