What is the Swiggy IPO All About?
Swiggy’s IPO is designed to bring new capital into the company and allow existing shareholders to sell some of their holdings. Swiggy aims to raise ₹11,327.43 crore from this initial public offering, with a mix of fresh shares and offer for sale (OFS) components. The IPO subscription window is open from November 6 to November 8, 2024.
Swiggy IPO GMP Today
The grey market premium (GMP) is one of the most-watched indicators for any IPO. Currently, Swiggy’s shares are trading at a GMP of ₹11 in the grey market. While this premium is modest, it reflects positive investor sentiment and hints at a healthy demand for Swiggy’s shares in the unofficial market.
Swiggy IPO Subscription Status
On the opening day, the Swiggy IPO subscription saw a tepid response, but that’s not unusual for early trading. As of 11:48 AM on day one:
- The public issue was subscribed 0.06 times.
- The retail portion was subscribed 0.29 times.
- The Non-Institutional Investors (NII) portion had a 0.02 times subscription.
It’s expected that the subscription numbers will pick up pace as the week progresses.
Key Details of Swiggy IPO
Here’s a rundown of the essential details every potential investor should know about the Swiggy IPO:
- Swiggy IPO GMP: The current grey market premium for Swiggy stands at ₹11.
- Swiggy IPO Price Band: The IPO price is set in a range of ₹371 to ₹390 per share.
- Swiggy IPO Dates: The bidding window is open from November 6 to November 8, 2024.
- Swiggy IPO Size: Swiggy aims to raise ₹11,327.43 crore, a substantial sum, which will be partly funded by fresh shares and partly by an offer for sale.
- Swiggy IPO Lot Size: Investors can apply in lots, with one lot consisting of 38 shares.
- Swiggy IPO Allotment Date: The expected date for share allotment is November 9, 2024.
- Swiggy IPO Registrar: Link Intime India Private Limited has been appointed as the official registrar for the IPO.
- Swiggy IPO Listing Date: Swiggy is expected to be listed on the BSE and NSE by November 13, 2024.
- Lead Managers for Swiggy IPO: Leading financial firms, including Kotak Mahindra Capital, Citigroup Global Markets India, and JP Morgan India, are managing the IPO.
Expert Review: Should You Subscribe to Swiggy’s IPO?
The big question on every investor’s mind is whether to subscribe to Swiggy’s IPO or not. Opinions vary among market analysts, offering both optimistic and cautious perspectives.
Pro-Subscription Analysis
Rajan Shinde, Research Analyst at Mehta Equities, highlights Swiggy’s strategic growth and innovation as factors that make this IPO an attractive choice. He advises investors to subscribe to the IPO, particularly if they’re seeking exposure to the burgeoning hyperlocal commerce market. In his view, Swiggy’s established presence and continuous expansion put it in a favorable position for long-term growth.
Cautionary Perspective
On the flip side, Anshul Jain, Head of Research at Lakshmishree Investment and Securities, has issued a Do Not Subscribe rating. He suggests that Swiggy’s valuation—currently about half of rival Zomato’s—might seem appealing but warns against seeing it as an arbitrage opportunity. Jain believes Swiggy would need improvements in EBITDA to 3-4% and a higher Average Order Value (AOV) in quick commerce to close the valuation gap. However, he does not expect these improvements in the near term, leading him to a cautious stance.
Factors to Consider Before Applying for Swiggy IPO
Investing in an IPO is a major decision, especially for companies like Swiggy that operate in highly competitive markets. Here are some points to consider:
- Market Position: Swiggy holds a strong place in the online food delivery market, especially in India, where demand continues to rise.
- Financial Health: Look at Swiggy’s financials and whether it’s showing consistent profitability or heavily relying on growth over profit.
- Industry Competition: With competition from companies like Zomato, Swiggy has to continually innovate and expand, which may pressure its margins.
- Growth Potential: If you believe in the long-term growth of the hyperlocal delivery sector, Swiggy’s IPO could align well with that outlook.
Swiggy IPO vs. Competitors
Comparing Swiggy with its major competitor, Zomato, provides insights for investors. Swiggy’s valuation is significantly lower than Zomato’s, which could appeal to value investors. However, unlike Zomato, Swiggy has diversified into quick commerce with services like Instamart. This move is ambitious but costly, and only time will tell if it pays off.
How Does Swiggy’s Grey Market Premium (GMP) Impact the IPO?
The GMP of Swiggy’s IPO plays an influential role in gauging retail interest. A higher GMP indicates strong demand, often translating to a better listing day performance. However, while the grey market premium for Swiggy has been relatively modest, it still reflects a positive sentiment among early investors.
Swiggy IPO Allotment and Listing
Once the IPO subscription period closes, applicants can expect allotment by November 9, 2024. Swiggy’s official listing on the BSE and NSE is tentatively scheduled for November 13, 2024. If you’re allotted shares, you’ll be able to start trading them upon listing.
Should You Apply for Swiggy’s IPO?
The answer depends on your investment goals. If you’re looking for a stake in a company that’s both established and innovating, Swiggy might be worth considering for the long term. On the other hand, if you’re wary of the challenges in the hyperlocal commerce space or seeking immediate profits, you may want to evaluate other opportunities.
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Conclusion
Investing in Swiggy IPO offers an opportunity to be part of India’s growing online delivery market. With strong growth potential, strategic investments, and a foothold in the quick commerce sector, Swiggy is positioned to evolve. However, with fierce competition and profitability challenges, investors should weigh the risks carefully. The Swiggy IPO could be an exciting addition to a long-term portfolio, but it’s essential to consider your financial goals and risk tolerance before making a decision.
