India’s food and grocery delivery giant Swiggy is set to launch its IPO on November 6 and it is to marking a critical moment for the company as well as for the Indian tech sector. Its IPO arrives with a reduced valuation of $11.3 billion despite being one of India’s leading names in hyperlocal commerce. Its valuation was once anticipated at $15 billion.
The grey market is often a barometer of retail investor sentiment and has responded moderately. Swiggy’s shares were trading at a 5% premium or about ₹19 above the IPO price band of ₹371 to ₹390 three days ahead of the IPO. The grey market premium (GMP) hints at some investor enthusiasm and the modest scale of the premium reflects a tempered optimism.
Swiggy is aiming to raise ₹11,327 crore through a mix of fresh equity and an offer-for-sale (OFS) from key backers like Accel India, Tencent Cloud Europe and Alpha Wave Ventures. The company’s employees are being offered the shares at a discount and this indicates its awareness of the mixed investor sentiment as well as an effort to maintain internal confidence.
The institutional side of the IPO shows greater confidence. Major players like Norway’s sovereign wealth fund, Norges and Fidelity have reportedly placed bids worth more than $15 billion. It is a remarkable show of faith that outstrips the ₹605 million portion earmarked for institutional investors. The powerful interest from prominent funds indicates that despite near-term hurdles and there is still belief in its potential for long-term value creation.
Swiggy’s story has been challenging in terms of finance. The company posted a consolidated loss of ₹2,350 crore in FY24 on a revenue of ₹11,634 crore. While Swiggy has expanded its business model from food delivery to grocery services and operational costs as well as competition have kept profitability elusive.
