diff --git a/packages/element/src/resizeElements.ts b/packages/element/src/resizeElements.ts
index 8a1702afa..7ded4dc0a 100644
--- a/packages/element/src/resizeElements.ts
+++ b/packages/element/src/resizeElements.ts
@@ -1369,8 +1369,21 @@ export const resizeMultipleElements = (
       );
 
     if (keepAspectRatio) {
-      scaleX = scale;
-      scaleY = scale;
+      // If the elements are in a group and shouldMaintainAspectRatio is true(meaning user is holding shift),
+      // we need to adjust the scaleX or scaleY based on the handleDirection
+      if(targetElements.some(item => isInGroup(item.latest)) && shouldMaintainAspectRatio) {
+        if(handleDirection.length === 1) {
+          if(handleDirection.includes("e") || handleDirection.includes("w")) {
+            scaleX = scale;
+          } else if (handleDirection.includes("n") || handleDirection.includes("s")) {
+            scaleY = scale;
+          }
+        }
+      }
+      else {
+        scaleX = scale;
+        scaleY = scale;
+      }
     }
 
     /**
@@ -1481,11 +1494,15 @@ export const resizeMultipleElements = (
       }
 
       if (isTextElement(orig)) {
-        const metrics = measureFontSizeFromWidth(orig, elementsMap, width);
-        if (!metrics) {
-          return;
+        if (!shouldMaintainAspectRatio) {
+          const metrics = measureFontSizeFromWidth(orig, elementsMap, width);
+          if (!metrics) {
+            return;
+          }
+          update.fontSize = metrics.size;
+        } else {
+          update.fontSize = orig.fontSize;
         }
-        update.fontSize = metrics.size;
       }
 
       const boundTextElement = originalElementsMap.get(
@@ -1493,7 +1510,7 @@ export const resizeMultipleElements = (
       ) as ExcalidrawTextElementWithContainer | undefined;
 
       if (boundTextElement) {
-        if (keepAspectRatio) {
+        if (keepAspectRatio && !shouldMaintainAspectRatio) {
           const newFontSize = boundTextElement.fontSize * scale;
           if (newFontSize < MIN_FONT_SIZE) {
             return;
diff --git a/packages/element/tests/groupResize.test.tsx b/packages/element/tests/groupResize.test.tsx
new file mode 100644
index 000000000..c3be95be1
--- /dev/null
+++ b/packages/element/tests/groupResize.test.tsx
@@ -0,0 +1,116 @@
+import { API } from "@excalidraw/excalidraw/tests/helpers/api";
+import { UI, Keyboard, Pointer } from "@excalidraw/excalidraw/tests/helpers/ui";
+import { KEYS } from "@excalidraw/common";
+import { unmountComponent } from "@excalidraw/excalidraw/tests/test-utils";
+import { render } from "@excalidraw/excalidraw/tests/test-utils";
+import { Excalidraw } from "@excalidraw/excalidraw";
+const { h } = window;
+const mouse = new Pointer("mouse");
+
+unmountComponent();
+
+describe("group resize", () => {
+  beforeEach(() => {
+    h.elements = [];
+  });
+
+  it("resizes group with locked aspect ratio using side handles", async () => {
+    await render(<Excalidraw handleKeyboardGlobally={true} />);
+    
+    UI.clickTool("rectangle");
+    mouse.down(10, 10);
+    mouse.up(10, 10);
+
+    UI.clickTool("rectangle");
+    mouse.down(10, -10);
+    mouse.up(10, 10);
+
+    UI.clickTool("rectangle");
+    mouse.down(10, -10);
+    mouse.up(10, 10);
+    const end = mouse.getPosition();
+
+    mouse.reset();
+    mouse.down();
+    mouse.restorePosition(...end);
+    mouse.up();
+
+    expect(h.elements.length).toBe(3);
+    for (const element of h.elements) {
+      expect(element.groupIds.length).toBe(0);
+      expect(h.state.selectedElementIds[element.id]).toBe(true);
+    }
+
+    Keyboard.withModifierKeys({ ctrl: true }, () => {
+      Keyboard.keyPress(KEYS.G);
+    });
+
+    for (const element of h.elements) {
+      expect(element.groupIds.length).toBe(1);
+    }
+
+    mouse.select(h.elements[0]);
+    let originalWidth = h.elements[0].width;
+    let originalHeight = h.elements[0].height;
+
+    UI.resize(h.elements[0], 'se', [50, 50], { shift: true });
+
+    expect(h.elements[0].width).toBe(originalWidth + 50);
+    expect(h.elements[0].height).toBe(originalHeight + 50);
+
+    originalWidth = h.elements[0].width;
+    originalHeight = h.elements[0].height;
+
+    UI.resize(h.elements[0], "e", [50, 0], { shift: true });
+
+    expect(h.elements[0].width).toBe(originalWidth - 50);
+    expect(h.elements[0].height).toBe(originalHeight - 50);
+  });
+
+  it("resizes group with locked aspect ratio using corner handles", async () => {
+    await render(<Excalidraw handleKeyboardGlobally={true} />);
+    
+    UI.clickTool("rectangle");
+    mouse.down(10, 10);
+    mouse.up(10, 10);
+
+    UI.clickTool("rectangle");
+    mouse.down(10, -10);
+    mouse.up(10, 10);
+
+    UI.clickTool("rectangle");
+    mouse.down(10, -10);
+    mouse.up(10, 10);
+    const end = mouse.getPosition();
+
+    mouse.reset();
+    mouse.down();
+    mouse.restorePosition(...end);
+    mouse.up();
+
+    expect(h.elements.length).toBe(3);
+    for (const element of h.elements) {
+      expect(element.groupIds.length).toBe(0);
+      expect(h.state.selectedElementIds[element.id]).toBe(true);
+    }
+
+    Keyboard.withModifierKeys({ ctrl: true }, () => {
+      Keyboard.keyPress(KEYS.G);
+    });
+
+    for (const element of h.elements) {
+      expect(element.groupIds.length).toBe(1);
+    }
+
+    mouse.select(h.elements[0]);
+
+    let originalWidth = h.elements[0].width;
+    let originalHeight = h.elements[0].height;
+
+    UI.resize(h.elements[0], "se", [50, 50], { shift: true });
+
+
+    expect(h.elements[0].width).toBe(originalWidth + 50);
+    expect(h.elements[0].height).toBe(originalHeight + 50);
+  });
+}); 
\ No newline at end of file