“You have been watching the IPO markets closely. Groww’s market cap has crossed ₹1 lakh crore. But the stock is trading at 25 to 27 times higher than its revenue. Do you think this is justified?” Narendra Solanki was asked in an interview with ET Now.
Solanki said: “The post-listing run-up for many IPOs has been strong, and valuations are certainly high at the moment. It may take a few quarters before we see how new customers and overall business performance will develop. Investors who focused on the long term were right to subscribe during the IPO.”
On Groww’s 91% return since listing, Solanki added, “It’s an individual call for investors. But equity investment penetration in India is still low, so there is tailwind for the sector. Valuations have moved ahead of fundamentals, so it is more justified for the medium to long term.”
As for education platform PhysicsWallah, Solanki noted: “The listing was very good, above market expectations. We remain positive on the sector, but valuations are pricey, so a long-term focus is advisable.” As investors consider high-growth IPOs like Groww and PhysicsWallah, experts suggest they should be cautious about short-term transactions while recognizing the long-term potential of India’s digital finance and education sectors.
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