Swiggy's ₹11,300 crore IPO opens tomorrow: Should you subscribe?
Swiggy, one of India's leading online food delivery platform, will launch its much-awaited initial public offering (IPO) on November 6. The IPO will be open for subscription till November 8. The company hopes to raise ₹11,327 crore through the public issue. It consists of a fresh issuance of 11.54 crore shares worth ₹4,499 crore and an offer for sale (OFS) by existing shareholders of up to 17.5 crore shares worth ₹6,828 crore.
Swiggy IPO: Price band and share allotment
Swiggy has fixed the price band for its IPO at ₹371-390 per share. Investors can bid for a minimum of 38 shares in a single lot. Ahead of the IPO opening, unlisted shares of the SoftBank-backed company were trading at a gray market premium (GMP) of ₹20, reflecting tepid demand for the issue.
Mixed analyst ratings on Swiggy's IPO
The upcoming IPO has received mixed reviews from analysts. While some suggest subscribing to it due to fair valuation, others caution against it due to "reported negative" cash flows and ongoing losses. SBI Securities and Bajaj Broking recommend a long-term subscription, while Aditya Birla Money advises against investing in the IPO. As of FY24, Swiggy still operates at a loss, unlike its competitor Zomato which recently turned profitable.
Swiggy's post-IPO market capitalization and share distribution
At the upper end of the price band, Swiggy is expected to have a post-listing market capitalization of ₹87,299 crore. The company has reserved 7.5 lakh shares for its employees. Meanwhile, up to 75% of the net offer has been reserved for qualified institutional buyers (QIBs), 15% for non-institutional investors (NIIs), and the remaining 10% for retail investors.
