As the Swiggy IPO enters its third day of bidding, investors are eager to assess its performance and make informed decisions. Priced between ₹371 and ₹390, the IPO has garnered significant interest, raising approximately ₹5,085.02 crore. This article provides a comprehensive overview of the current subscription status, grey market premium (GMP), important dates, and expert opinions on whether to apply for the IPO.
Current Subscription Status
The Swiggy IPO has seen considerable participation from investors. As of the latest updates:
- Overall Subscription: The IPO is currently subscribed at 35%.
- Retail Investors: The retail portion has been particularly strong, with a subscription rate of 84%.
- Qualified Institutional Buyers (QIBs): This segment has achieved a subscription rate of 28%.
- Non-Institutional Investors (NIIs): The NII portion is subscribed at 14%.
- Employee Allocation: The employee segment has been subscribed 1.15 times.
Grey Market Premium (GMP)
The grey market premium for Swiggy shares is currently at ₹2, indicating a potential listing price of approximately ₹392, which is about 0.51% higher than the upper end of the IPO price band. However, it’s important to note that the GMP has shown a downward trend in recent sessions.
IPO Details
The Swiggy IPO consists of a fresh issue worth ₹4,499 crore, along with an offer-for-sale (OFS) of approximately 175 million equity shares from various selling shareholders, including notable investors such as Accel India IV and Tencent Cloud Europe B.V. Here are some key details:
- Price Band: ₹371 – ₹390
- Lot Size: 500 shares
- Total Offer Size: ₹5,085.02 crore
- Use of Proceeds:
- Expanding dark store networks for quick commerce.
- Marketing and advertising initiatives.
- Debt repayment and general corporate purposes.
Important Dates
Here are key dates related to the Swiggy IPO that investors should keep in mind:
| Event | Date |
|---|---|
| IPO Subscription Period | November 6 – 8, 2024 |
| Basis of Allotment | November 9, 2024 |
| Refunds Initiated | November 10, 2024 |
| Shares Credited to Demat Accounts | November 11, 2024 |
| Listing Date | November 12, 2024 |
Should You Apply for Swiggy’s IPO?
Given the current subscription rates and market conditions, investors must consider several factors before deciding whether to apply for Swiggy’s IPO:
- Strong Retail Demand: The retail investor segment shows robust interest with an impressive subscription rate of 84%, indicating confidence among individual investors.
- Growth Potential: Swiggy’s revenue increased by 34% between March 2023 and March 2024, demonstrating strong business growth despite previous losses narrowing from ₹4,179.31 crore to ₹2,350.24 crore during the same period.
- Competitive Landscape: While Swiggy holds a significant position in the food delivery market, it faces intense competition from rivals like Zomato and Zepto. Experts have highlighted concerns regarding Swiggy’s innovation pace compared to its competitors.
- Valuation Metrics: Analysts have noted that at an upper price band of ₹390 per share, Swiggy’s valuation appears attractive compared to Zomato’s metrics. However, some experts believe it deserves to trade lower due to competitive pressures.
- Long-Term Perspective: Several analysts recommend subscribing to the IPO with a long-term investment perspective due to Swiggy’s established brand presence and growth strategies in quick commerce.
Expert Opinion
Experts have mixed opinions on whether investors should apply for Swiggy’s IPO:
- Positive Outlook: Some analysts view Swiggy’s strong brand presence and growth potential in the food delivery space as compelling reasons to invest. The company reported significant revenue growth and is strategically expanding its service offerings.
- Caution Advised: On the other hand, some experts caution that Swiggy faces stiff competition from rivals like Zomato and Zepto. Mohit Gulati, CIO and Managing Partner of ITI Growth Opportunities Fund, emphasized that while Swiggy has been a dominant player, it may have lost its edge in innovation compared to its competitors.
“I think the company has lost its mojo on innovation where Zomato and Zepto have benefited,” Gulati noted.
Conclusion
As Swiggy’s IPO approaches its closing date today, investors must weigh their options carefully. With strong participation from retail investors and a modest grey market premium, there are both opportunities and risks associated with this offering.
Disclaimer
The views and recommendations provided in this article are based on various sources and do not constitute financial advice or recommendations for investment decisions. Investors should conduct their own research or consult with certified financial experts before making any investment choices.This overview aims to keep investors informed about the latest developments regarding the Swiggy IPO while highlighting key aspects that may influence their investment decisions moving forward.
