Swiggy IPO GMP indicates modest listing gains as Zomato's rival looks to raise over Rs 11,000 crore

Just like its peer Zomato, Swiggy is also experiencing a faster growth in its quick commerce business.

Swiggy's much-anticipated initial public offering (IPO) is slated to open for public subscription next week, marking a significant moment for the online food delivery giant as it seeks to raise Rs 11,330 crore.

The IPO arrives at a challenging time, with concerns around urban demand slowdown and foreign investor outflows weighing on the domestic market.

Adding to the cautious mood is Hyundai Motor India’s recent listing on the stock exchanges, which saw a flat listing. The subdued response to Hyundai India’s debut appears to have impacted demand for Swiggy’s shares, which is reflected in the soft Grey Market Premium (GMP) just days before the IPO opens for subscription

Swiggy shares are currently trading at a GMP of Rs 22-25, indicating an approximate 6.41 percent listing gains, as per data from Investorgain, which tracks grey market trends.

This is a significant drop from the earlier projected GMP of Rs 130 on October 29 on IPO Watch, reflecting dampened sentiment in the grey market. However, GMP remains a speculative indicator and does not always match with the actual listing price.

The investors who acquired Swiggy shares in the unlisted market have seen their positions impacted by recent developments. Swiggy’s shares traded at over Rs 500 in the unlisted space just a month ago, driven by projections of a potential $15-billion valuation.

However, with the IPO price band set at Rs 371-390 per share, the company's valuation has now been adjusted to around $11.3 billion, potentially impacting unlisted investors.

The public issue is set to open for bidding from November 6 to November 8. Swiggy’s rapid expansion in quick commerce, which now accounts for 40 percent of its revenue, is expected to fuel its growth trajectory, mirroring trends seen in peer Zomato.

According to Reuters which quoted sources, big investors including Norway's sovereign wealth fund Norges and Fidelity have placed bids worth more than $15 billion in Swiggy's IPO, 25 times the $605-million portion reserved for such investors.