Swiggy, one of India’s largest food delivery and quick commerce platforms, is set to launch its much-awaited Initial Public Offering (IPO) on November 6, 2024. As Swiggy prepares to go public, retail and institutional investors are closely watching what could be one of the largest IPOs in India’s tech landscape this year. With an aim to raise more than ₹11,000 crore, Swiggy IPO is a significant milestone in its journey as a key player in India’s consumer-tech sector.
Here’s a detailed breakdown of the key facts and information you need to know about the Swiggy IPO:
1. Swiggy IPO Dates and Listing Information
- IPO Open Date: November 6, 2024
- IPO Close Date: November 8, 2024
- Allotment Date: November 11, 2024
- Refund Initiation: November 12, 2024
- Credit of Shares to Demat Accounts: November 12, 2024
- IPO Listing Date: November 13, 2024
2. IPO Price Band
Swiggy has set the price band for the IPO at ₹371 to ₹390 per share. The price band reflects a strategic valuation, with the upper range targeting premium investors, but still remaining competitive in the food and quick commerce delivery space. Swiggy share has also become one of the most searched terms on the internet.
3. Size of the Swiggy IPO
Swiggy aims to raise ₹11,327.43 crore through a combination of:
- A fresh issue of 11.54 crore equity shares, worth approximately ₹4,499 crore, and
- An offer for sale (OFS) of 17.51 crore shares, valued at ₹6,828.43 crore.
This dual approach allows Swiggy to raise fresh capital while offering a liquidity event for existing investors looking to exit.
4. Offer for Sale (OFS)
A significant portion of the IPO includes shares sold by Swiggy’s early investors in the Offer for Sale (OFS) portion. Prominent investors include:
- Accel India IV (Mauritius) Ltd
- Alpha Wave Ventures
- Apoletto Asia Ltd
- DST EuroAsia V B.V
- Tencent Cloud Europe B.V
- MIH India Food Holdings B.V
- Norwest Venture Partners
The OFS will allow these venture capitalists to partially or fully exit their investment in Swiggy.
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5. Swiggy IPO Lot Size and Minimum Investment
Retail investors must purchase a minimum lot size of 38 shares, requiring a minimum investment of ₹14,820 at the lower end of the price band.
6. Objectives of the Swiggy IPO
Swiggy plans to utilize the proceeds from the fresh issue for the following objectives:
- Investment in Subsidiaries: Part of the proceeds will be used for investments in its subsidiaries, particularly Scootsy.
- Technology and Cloud Infrastructure: Swiggy will invest in further strengthening its tech backbone, ensuring scalability and better user experience.
- Marketing and Brand Awareness: A substantial amount will go towards marketing and promotional activities to enhance Swiggy’s brand visibility and reach across new and existing markets.
- Inorganic Growth: The company plans to explore acquisitions to grow its presence in quick commerce and related fields.
7. Book Running Lead Managers (BRLMs) and Registrar
The IPO will be managed by a robust team of Book Running Lead Managers (BRLMs), including:
- Kotak Mahindra Capital
- Citigroup Global Markets India
- Jefferies India
- Avendus Capital
- JP Morgan India
- BofA Securities
- ICICI Securities
The registrar for the IPO is Link Intime India Pvt Ltd.
8. Reservation for Investors
The Swiggy IPO has been structured to ensure participation from different classes of investors:
- 75% of the shares are reserved for Qualified Institutional Buyers (QIBs),
- 15% for Non-Institutional Investors (NIIs), and
- 10% for retail investors. Additionally, 750,000 shares are reserved for employees at a discounted price of ₹25 per share.
9. Swiggy IPO GMP (Grey Market Premium)
As of today, Swiggy’s grey market premium (GMP) stands at ₹20 per share. This means that Swiggy shares are being traded in the grey market at a premium of ₹410, indicating healthy demand. However, analysts advise investors to be cautious as GMP is a speculative indicator and could fluctuate until the listing.
10. Review and Analyst Opinions
Brokerages have offered mixed reviews on the Swiggy IPO:
- SBI Securities recommends a “subscribe” for long-term investors, citing Swiggy’s large addressable market in online food delivery and quick commerce. They view Swiggy’s valuation as fair when compared to its competitor, Zomato, and other global food-tech companies. At a Price-to-Sales (P/S) multiple of 7.8x (FY24), it is seen as appropriately priced.
- On the other hand, Aditya Birla Money advises caution due to the company’s continued losses and negative cash flow. The slightly high valuation at 7.7x FY24 price-to-sales raises concerns about Swiggy’s ability to turn profitable in the near term, especially considering the competitive pressures from Zomato and other quick commerce entrants.
Beyond Swiggy IPO: What is Swiggy?
Founded in 2014, Swiggy has evolved from a food delivery startup to a diversified tech platform that now spans multiple verticals, including:
- Food Delivery: Operating in 681 cities, food delivery remains Swiggy’s core business, generating the majority of its revenues.
- Instamart: A quick commerce offering for grocery and daily needs items, enabling fast delivery of essentials.
- Dineout: A platform for restaurant reservations and dining experiences.
- SteppinOut: For event bookings.
- Genie: Swiggy’s hyperlocal service for pick-up and drop-off tasks.
Financial Performance
While Swiggy has expanded its operations, it has also faced significant losses over the past few years:
- FY24 revenue: ₹11,634.35 crore
- FY24 net loss: ₹2,350.24 crore
In the first quarter of FY25 (ending June 2024), Swiggy reported:
- Revenue: ₹3,310.11 crore
- Net loss: ₹611.01 crore
Conclusion: Should You Invest?
Swiggy’s IPO offers investors an opportunity to invest in one of India’s largest consumer tech companies. While the company faces challenges like sustained losses and high competition, its market leadership in online food delivery and growing presence in quick commerce are compelling factors. Investors with a high-risk tolerance and a long-term horizon may consider subscribing to the IPO, given the company’s future growth potential.
However, cautious investors may want to weigh the risks of ongoing losses and market competition, especially in light of mixed analyst recommendations. As always, potential investors should consult with certified financial advisors before making any investment decisions.
