A sharp post-listing rally in Groww-backed Billionbrain Garage Ventures has triggered unexpected turmoil for traders, with more than 30 lakh shares slipping into the NSE auction window—an unusually large quantity that signals a deepening short-seller trap.
Data released by the exchange on Tuesday highlighted the scale of the auction, reflecting how aggressively traders had bet against the counter. Many expected the stock’s early surge to cool off and built intraday short positions, assuming they would be able to buy back shares at lower levels. Instead, the stock extended its upward run, leaving a significant number of traders unable to deliver shares on the settlement date. This forced the shortfall into the auction segment.
The squeeze comes against the backdrop of extraordinary listing gains. Groww, which debuted on November 12, has soared nearly 90% above its issue price of ₹109 within four sessions. Its market value has crossed ₹1.17 lakh crore, moving ahead of BSE Ltd and even overtaking several Nifty 50 constituents such as Tata Consumer Products, Max Healthcare, Apollo Hospitals and Dr Reddy’s Laboratories.
Short sellers now face steep settlement penalties. In close-out scenarios—where sellers fail to provide delivery—the exchange settles the trade by compensating buyers with an additional amount, typically 20–25% higher than the traded price. This penalty is borne entirely by the seller. Even when delivery is sourced through the auction window, the overall cost impact remains broadly similar.
Market analysts note that these mechanics do not affect the fundamentals of the company but can add temporary upward pressure on the stock due to forced short covering. Some believe the squeeze could offer limited additional upside, though the stock’s rapid appreciation has already made valuations appear stretched.
Once the auction process is completed, price movements typically stabilise. Given the sharp rise since listing, analysts suggest that risk-averse investors may consider taking profits while momentum remains elevated.
