Food delivery giant Swiggy is set to list at a valuation of $11.3 billion for its .upcoming IPO (Swiggy IPO). This marks a reduction from its earlier target of over $15 billion, attributed to current volatility in the Indian stock market and a desire to attract more retail investors.
The last private valuation occurred when Invesco invested at a $10.3 billion valuation. Swiggy IPO is expected to open for subscription after November 6, 2024, with over 30 foreign investors anticipated to anchor the book.
In the competitive landscape, Swiggy faces off against Zomato in India’s online food delivery sector. Both companies are heavily invested in the emerging quick commerce sector, focusing on rapid delivery of groceries and other products within 10 minutes.
The Indian stock market is experiencing a correction due to ongoing foreign fund outflows, high valuations, and geopolitical tensions. The Nifty 50 and Sensex indices have faced their longest weekly losing streak in 14 months, exacerbated by disappointing corporate earnings that have pushed the markets into bear territory just ahead of Diwali and the start of Samvat 2081.
Swiggy, backed by SoftBank and Prosus, is aiming to list in November 2024. The company plans to conduct roadshows for its stock offering across several Indian cities starting October 30. The IPO will feature a new issuance of equity shares valued at ₹3,750 crore and the sale of 18.52 crore existing shares through an offer-for-sale (OFS), as outlined in the updated draft red herring prospectus (UDRHP).
Swiggy is also exploring a pre-IPO fundraising round, which may adjust the size of the new issuance. The IPO will cater to qualified institutional buyers (QIBs), anchor investors, mutual funds, and non-institutional buyers, with one-third of the allocation for those applying between ₹2 to ₹10 lakh and the remainder for larger bids. A portion will also be reserved for retail investors.
The IPO’s book-running lead managers include Kotak Mahindra Capital Company, Citigroup Global Markets India Private Ltd, Jefferies India Private Ltd, and Avendus Capital Private Ltd, while Link Intime India Private Ltd serves as the registrar.
Swiggy’s confidential offer document was accepted by the Securities and Exchange Board of India (SEBI) in September, following its initial submission on April 30 under the confidential pre-filing process.
Despite ongoing challenges, including negative cash flows, Swiggy has managed to reduce its net losses from ₹4,179.30 crore in FY23 to ₹2,350.24 crore for the fiscal year ending March 31. During the same period, operating revenue rose to ₹11,247.39 crore, up from ₹8,264.59 crore in the previous year.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.
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