Swiggy IPO Opens for Subscription: Should You Consider Investing? Key Details, GMP, and More

Swiggy IPO: All You Need to Know About the Share Offering

Swiggy, India’s leading food delivery and quick-commerce company, has officially opened its IPO for public subscription on November 6, 2024. With an ambitious target of raising Rs 11,327 crore, this IPO has generated significant interest. However, early grey market signals indicate that the listing gain may be modest. Below, we break down the key details of the Swiggy IPO, including its price band, GMP, and expert opinions on whether investors should subscribe.

Swiggy IPO Overview: What’s on Offer?

• Total Offer Size: Rs 11,327 croreThe Swiggy IPO will consist of two parts: a fresh issue of Rs 4,499 crore and an offer for sale (OFS) of Rs 6,828 crore.
• Price Band: Rs 371 to Rs 390 per shareThis price range places the Bengaluru-based company’s valuation at approximately Rs 95,000 crore, at the upper price band. For comparison, Swiggy's competitor Zomato listed at a market valuation of Rs 2.13 lakh crore in 2021.
• IPO Period: The issue will remain open until November 8, 2024, with the allotment results expected soon after. The listing is anticipated to take place on the BSE and NSE in mid-November.

Should You Subscribe? Key Expert Insights

The Swiggy IPO has sparked varied reactions from analysts. The brokerage SBI Securities has recommended that investors consider subscribing to the issue, especially for those looking at long-term growth. The company's strong revenue growth and its robust presence across 500 cities in India provide a promising outlook.

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According to analysts, the IPO’s pricing aligns with Swiggy’s potential as a market leader in the food delivery space, but there are risks involved. Analysts have pointed out that any mismanagement in the dark store network or a decline in user base could adversely affect future cashflows and business performance.

Bajaj Broking has also given a 'Subscribe' recommendation, citing Swiggy's solid long-term prospects, with a reported 42.4% increase in revenue from FY2022 to FY2023.

Grey Market Premium (GMP) and Listing Expectations

Swiggy’s grey market premium (GMP) has been fluctuating, offering a mixed signal about its listing. Currently, Swiggy shares command a GMP of Rs 12, indicating a 3% premium in the unofficial market. However, this figure has come down significantly from a higher GMP of Rs 25 recorded in late October 2024.

This decline in the GMP could suggest that market expectations for a major listing gain have cooled, but there is still potential for a modest initial return.

Company Financials: A Closer Look at Swiggy’s Performance

Swiggy, founded in 2014, has seen impressive growth but has also struggled with profitability. The company posted a loss of Rs 611 crore for the quarter ended June 2024, though this was a narrower loss compared to the Rs 564 crore loss in the same period the previous year.

While Swiggy has faced challenges in achieving profitability, its strong growth trajectory and leadership in the competitive food delivery industry remain attractive factors for investors.

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The Swiggy IPO presents an opportunity for investors to participate in one of India's largest food-tech companies. While experts are cautiously optimistic about its long-term growth potential, the grey market signals a modest listing gain. Retail investors looking for long-term exposure to a leading food delivery company may find value in subscribing, though it’s essential to be aware of the risks tied to the company's path to profitability.

As always, potential investors should evaluate their risk tolerance and financial goals before making a decision.

[Disclaimer: The content and subscription details presented here are based on information available as of November 6, 2024. These figures and insights may change as the IPO process unfolds.]