Swiggy IPO faces uncertainty as GMP lowers to 5%
Swiggy, a dominant player in India's online food delivery market, will launch its initial public offering (IPO) on November 6. The company has fixed a price band of ₹371-₹390 per share for the IPO. Three days ahead of the issue opening, Swiggy's gray market premium (GMP) stood at 5% or ₹19 in the unlisted market. This means investors are ready to pay around ₹409 for one share of the company, which suggests that the buzz surrounding the IPO is muted.
Swiggy's IPO valuation and market performance
Swiggy has revised its IPO valuation to $11.3 billion, from an earlier target of about $15 billion. The change comes amid the prevailing market volatility and Hyundai India's lackluster debut. A month ago, Swiggy shares were trading at ₹515 in the unlisted market. The company's last private round valuation was $10.7 billion when it raised $700 million in a US asset manager Invesco-led round in January 2022.
Swiggy increases fresh equity sale, reduces OFS component
For its upcoming IPO, Swiggy has raised its fresh equity sale to ₹4,499 crore while trimming the OFS component to 17.5 crore shares. Ahead of the IPO, the company's shares have been actively traded in the unlisted market. Notable shareholders include cricketers Rahul Dravid and Zaheer Khan, tennis star Rohan Bopanna, studio owner Karan Johar, and actor-entrepreneur Ashish Chowdhry.
Swiggy's post-IPO plans and market expectations
Post-IPO, analysts expect Swiggy to become EBITDA positive by cutting down on its promotional and advertising spends. The online food delivery market is expected to grow at 20% during CY23-28, mainly driven by a user CAGR of 8-10%. Swiggy competes with Zomato in India's online restaurant and food delivery space. Both companies are betting big on the emergence of "quick-commerce," with groceries and other products delivered in 10 minutes.
Swiggy's IPO details and allotment schedule
The Swiggy IPO is a ₹11,327.43 crore book-building issue. It includes a fresh issue of 11.54 crore shares (₹4,499 crore) and an OFS of 17.51 crore shares (₹6,828.43 crore). The allotment status for the Swiggy IPO will likely be finalized on November 11 with refunds and share transfers into Demat accounts starting November 12. The tentative listing date for the Swiggy IPO is November 13.
Swiggy's IPO bidding size and employee share allocation
For retail investors, the minimum bidding size is one lot of 38 shares, totaling ₹14,820. For small HNIs, the minimum application size is 14 lots or 532 shares, totaling ₹2,07,480. For b-HNI, the minimum application limit is 68 lots or 2,584 shares with an investment of ₹10,07,760. Swiggy has reserved up to 7.5 lakh shares for its employees at a ₹25 discount to the issue price.
