Swiggy initial public offer (IPO) opened for public subscription today in the primary market. The food delivery and quick-commerce firm is aiming to garner Rs 11,327 crore from its much-awaited initial share.
The valuation of Swiggy has been pegged at about Rs 95,000 crore at the upper price band. Rival Zomato, which went public in July 2021, has a market valuation of Rs 2.13 lakh crore.
The issue of the Bengaluru-based company will comprise a fresh issue of shares worth Rs 4,499 crore along with an offer for sale (OFS) of Rs 6,828 crore.
Swiggy primarily operates in a B2C marketplace platform where it aggregate restaurant & merchant partners that can list their food & products, while users can discover and purchase such items.
The company facilitates the fulfilment of these orders through enabling delivery, reservations, payments, and lead generation for partners.
SBI Securities in its IPO Note recommended investors to subscribe to the issue saying that on comparing with Zomato, the issue appears to be fairly priced on all the parameters. "We recommend investors to subscribe the issue for long term investment perspective," it added.
The analysts at the domestic brokerage, however, highlighted that any failure in managing the dark store network in a cost-effective way may have an adverse effect on its business. "Material decrease in user base in future could adversely affect the business, cashflows and results of operations," it added.
Swiggy has set a price band of Rs 371 to Rs 390 per share for its issue which will conclude on November 8 (Friday). Speaking about the pricing, Swiggy Food Marketplace CEO Rohit Kapoor told PTI, "Our pricing is in the range of Rs 371-390 which corresponds to a value of about USD 11.3 billion roughly. It is not exact because it depends on where the issue actually clears at the end of the day."
Bajaj Broking has also assigned a 'Subscribe' rating to the IPO, citing strong long-term growth prospects. The firm reported a 42.4 percent increase in revenue from FY2022 to FY2023 and its extensive presence across 500 cities in India were highlighted as key strengths by the brokerage.
In the grey market, shares of Swiggy are indicating modest listing. According to Investorgain which tracks the grey market activities, Swiggy shares are currently commanding a grey market premium (GMP) of Rs 12, reflecting a premium of around 3 percent in the unofficial market.
Earlier in the last week of October, the shares were commanding a GMP of Rs 25, a listing gain of 6.41 percent.
Swiggy, founded in 2014, posted a loss of Rs 611 crore in the quarter ended June 2024, narrowing from Rs 564 crore in the same period last year.
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