Swiggy's IPO: Price Band, GMP, Important Dates, and Should i Apply ?

Swiggy, one of India’s leading food delivery platforms, is set to launch its highly anticipated initial public offering (IPO) with a price band fixed between ₹371 and ₹390 per share. The subscription period for this IPO will commence on November 6 and conclude on November 8, 2024. The allocation for anchor investors is scheduled for November 5, while shares are expected to list on the BSE and NSE on November 13.

IPO Structure and Financials

The Swiggy IPO comprises a fresh issue of ₹4,499 crore alongside an offer-for-sale (OFS) of approximately 175 million equity shares from existing shareholders, including major investors like Prosus and Tencent. With the upper end of the price band, the total issue size could reach around ₹11,327 crore, positioning it as one of the largest IPOs in India this year.Despite experiencing significant losses amounting to ₹2,350.24 crore in the fiscal year 2024, Swiggy’s revenue surged by 34%, indicating robust growth potential. The company aims to utilize the proceeds from the IPO for various strategic initiatives, including:

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Investment in its subsidiary Scootsy
Debt management
Technology enhancements
Brand marketing

Important Dates

Anchor Investor Bidding: November 5, 2024
IPO Subscription Period: November 6 – November 8, 2024
Basis of Allotment: November 11, 2024
Initiation of Refunds: November 12, 2024
Credit of Shares to Demat Accounts: November 12, 2024
Listing on BSE and NSE: November 13, 2024

Grey Market Premium (GMP)

As of today, Swiggy’s shares are trading at a grey market premium (GMP) of ₹25, suggesting a potential listing price of approximately ₹415 per share, which is about 6.41% higher than the upper limit of the IPO price band.

Allocation Details

The IPO will allocate shares as follows:

75% for Qualified Institutional Buyers (QIB)
15% for Non-Institutional Investors (NII)
10% reserved for retail investors

Additionally, eligible employees will receive a discount of ₹25 per share on their allotment.

Should You Apply?

Investors considering whether to apply for Swiggy’s IPO should evaluate several factors:

Growth Potential: Swiggy has shown strong revenue growth and plans significant investments in expanding its dark store network and technology infrastructure.
Market Position: As a key player in the food delivery sector alongside Zomato, Swiggy’s competitive edge could attract investor interest.
Financial Health: While Swiggy has incurred losses, its narrowing loss figures indicate potential recovery and profitability in the future.

Ultimately, investors should weigh these factors against their risk tolerance and investment strategy before making a decision.

Strategic Plans Post-IPO

Swiggy plans to channel funds into expanding its dark store network to enhance its quick commerce segment. The company aims to open around 741 dark stores, significantly increasing its footprint in this rapidly growing sector. This expansion is part of a broader strategy to improve operational efficiency and customer service capabilities.

Conclusion

Swiggy’s upcoming IPO marks a significant milestone for the company as it seeks to strengthen its market position amidst growing competition from rivals like Zomato. With a solid growth trajectory and strategic use of raised capital, Swiggy aims to enhance its service offerings while addressing financial challenges.

Disclaimer: The information provided in this article is based on publicly available data and should not be considered as financial advice. Investors are encouraged to conduct their own research or consult with financial advisors before making investment decisions.