New Delhi: India’s leading food delivery app Swiggy has issued its Initial Public Offering (IPO) and will raise ₹11,327 crore. The issue for public subscription opened on today. It will close on 8 November 2024. Swiggy has fixed the issue price at ₹371 and ₹390. The market value of the company stands at about ₹95,000 crore at the higher end of this band. The IPO consists of new shares worth ₹4,499 crore and an Offer for Sale (OFS) worth ₹6,828 crore.
First Day Subscription Update:
Swiggy’s IPO was around 7% subscribed as of midday on the first day of bidding. Retail investors were the most active, with a subscription rate of 32%, while non-institutional investors subscribed to only 3%. Around 1.08 crore shares were bid for out of the total 16 crore shares on offer. Share allotment is planned for November 11, and Swiggy is expected to be listed on November 13.
Anchor Investor Subscription Before the opening of this IPO to the general public, Swiggy fetched ₹5,085 cr from anchor investors through allocation of 13.04 crore shares at ₹390 each. The pre-IPO round big-ticket investors saw global giant New World Fund Inc., Government Pension Fund Global, and BlackRock. About 5.3 crore of these allocated shares were given to the Indian mutual funds under diversified schemes.
Expansion Strategy and Financial Fitness Swiggy plans to use the IPO proceeds for enhancing its technology and cloud systems, promotions through a large marketing programs, and strategic acquisitions. It will spend ₹1,343.5 crore on the premium delivery service Scootsy, and ₹703 crore on tech.
While Swiggy has growth plans on the strong side, the company has still been facing financial problems. The firm reported a loss of ₹611 crore in the quarter ending June 2024, although this is lesser than a ₹564 crore loss reported in the same quarter last year.
Market Competition:
Swiggy’s IPO has drawn a parallel with Zomato, its largest competitor, which had raised its capital through an initial public offering in 2021 and is currently valued at around ₹2.13 lakh crore. Some analysts are advising subscription to the Swiggy IPO, given long-term growth potential, but they also sound a cautionary note over intense competition and the company’s continued losses.
Grey Market Performance:
The grey market is a platform where shares are traded informally before the actual listing; here, Swiggy’s shares are trading with a premium of ₹12 to ₹20. As such, this represents an average listing gain of approximately 3% to 5%. The figure has come in below previous projections where the premium was about ₹25.
