Swiggy Limited is set to launch its much-anticipated IPO from November 6 to November 8, 2024, with the price band fixed between ₹371 and ₹390 per share. The IPO includes a fresh issue of ₹4,499 crore and an offer for sale (OFS) of 17.5 crore shares by existing shareholders, with anchor investor allocations on November 5.
Key IPO Details
- Investor Allocation: 75% of the shares are reserved for Qualified Institutional Buyers (QIBs), 15% for Non-Institutional Investors (NIIs), and 10% for retail investors. Eligible employees receive a discount of ₹25 per share.
- Lot Size: 38 shares per lot, with bids required in multiples of this lot size.
Important IPO Dates
- Anchor Investor Allocation: November 5
- Subscription Period: November 6 to November 8
- Basis of Allotment: November 11
- Refund Initiation: November 12
- Shares Credited to Demat: November 12
- Listing Date: November 13 on BSE and NSE
Financial Performance and Market Sentiment
Swiggy reported revenue growth of 34% in FY24, reaching ₹11,247 crore, with operational losses decreasing from ₹4,179 crore to ₹2,350 crore, showing an improvement in efficiency. However, the company’s earnings per share (EPS) remains negative, making the price-to-earnings (P/E) ratio inapplicable. Meanwhile, the Grey Market Premium (GMP) for Swiggy’s shares has declined recently, dropping to ₹14 from ₹130, reflecting some investor caution over valuation.
Utilization of IPO Proceeds
Swiggy plans to use the funds raised through its IPO for several strategic initiatives:
- Debt Repayment: ₹137 crore to settle outstanding debt for its Scootsy subsidiary.
- Dark Store Expansion: ₹982 crore to expand its quick commerce dark store network.
- Technology Infrastructure: ₹586 crore to enhance tech capabilities.
- Brand Marketing: ₹929 crore to bolster its brand presence and customer acquisition.
- General Corporate Purposes: Funds will also support acquisitions and other corporate needs.
Growth Potential and Competitive Landscape
Founded in 2014, Swiggy has evolved from a food delivery platform into a diversified service provider with units like Instamart for grocery delivery, Swiggy Genie, and Swiggy Minis. It faces competition from Zomato, which has outperformed with higher revenue and profits, setting a high benchmark in the industry. However, Swiggy’s quick commerce operations are positioned as a future growth driver, aligning with consumer demand for convenience.
As Swiggy approaches its listing, investor interest is strong, with backing from celebrities and notable investors. With its solid market presence and expanded service portfolio, Swiggy’s growth outlook appears promising, though managing costs and achieving profitability remain critical.
Disclaimer: This information is for educational purposes only and should not be considered as financial advice. Investing in IPOs involves risks, including potential loss of capital. Please consult a financial advisor and review the official prospectus before making any investment decisions.
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