India’s largest food delivery service provider, Swiggy, is ready to list its IPO, which is scheduled between November 6 and November 8, 2024. This IPO is expected to attract a lot of attention, as it will provide an opportunity for investors to become shareholders in the escalating food ordering company. Here, the reader will find information about the IPO, organization, and future plans of Swiggy.
Key IPO Details
Swiggy’s IPO will include two main components:
- Fresh Issue: Swiggy was set to garner about ₹3,750 crore from a brand new issue of shares; nevertheless, the company raised it to ₹4,500 crore to cater to rising investors’ interest. SEBI regulations allow the increase of the primary issuance up to 20%.
- Offer for Sale (OFS): Current investors intend to dispose of up to 182 million shares through OFS to facilitate demand by enabling new shareholders to come on board.
The total IPO amount is to range between ₹11,700 crore to ₹11,800 crore with a proposed market capitalization of about $11.3 billion. This valuation is near Swiggy’s last private valuation of about 79 billion rupees or $10.7 billion and for good reason.
Key Dates:
- Public Offering: November 6-8, 2024
- Anchor Investor Bidding: Opens on November 5, 2024
Financial Performance
In the same period, it reported a consolidated net loss of ₹611 crore, up 8% YoY, while operating revenue increased by 35% YoY, to ₹3,222 crore for Swiggy. Swiggy’s GOV was nearly at about ₹35,000 crore for the financial year ending 2023-24 volumes of food delivery and quick commerce through Instamart.
Use of IPO Proceeds
Swiggy plans to allocate the IPO funds for:
- The key growth strategy is increasing stores, which includes expanding the logistics network and dark stores.
- Embracing technology, and cloud computing particularly.
- We are enhancing brand promotion and providing additional business and general operating costs.
Apart from delivering food, Swiggy to sustain its competitiveness in the market, has developed Instamart for grocery delivery and Swiggy Genie for pick-up-drop services. Recent activities include a 10-minute medicine delivery trial in Bengaluru and many options for ordering from India for NRIs, providing focus toward growth.
Competitive Landscape
Another rivalry exists in the form of the Zomato platform and recently launched delivery application Zepto and Blinkit. A market capitalization of over $26 billion shows how much pressure Swiggy faces, however different service delivery propositions arm it well.
Market Context
India’s stock market has been moving up and down, indices such as the Sensex and Nifty too fell by about 8% in October 2024. This could affect the perception of the IPO in the investment market but Swiggy being the recent entrant has received SEBI approval through a confidential filing to indicate preparedness to go to the market.
Investor Takeaway
Swiggy’s IPO offers an opportunity to capture a stake in one of the most prominent technology-enabled food delivery service organizations in India. While there is a threat resulting from current losses and market fluctuations, its expansion strategies reveal a growth-oriented company. More information that will be of interest to potential investors comprises the final price band of the issue along with the allotment dates as the IPO progresses
Disclaimer: Demat Dive is not giving any buying advice on any stock. Consult a SEBI registered advisor before investing anywhere.
