Swiggy IPO Makes A Decent Debut; Lists With Over 7% Premium
The issue's share price for the food platform to quick-commerce company was fixed between Rs 371 to 390
Swiggy shares listed at Rs 420 on the National Stock Exchange (NSE) on Wednesday with a premium of 7.7 per cent above the issue price of Rs 390, marking a decent debut on the stock exchanges amid the volatile market.
Subscriptions for Swiggy's Rs 11,327.43 crore IPO were accepted from November 06 to November 08. The issue's share price for the food platform to quick-commerce company was fixed between Rs 371 to 390.
After three days of bidding, Swiggy's IPO closed with strong demand, receiving 3.59 times bids. The qualified institutional buyers (QIB) category was the most heavily subscribed to, with 6.02 times as many subscriptions as the retail investor segment, which was booked 1.14 times.
The Swiggy IPO consisted of a 17.51 crore share offer for sale (OFS), totaling Rs 6,828.43 crore, and a new issue of 11.54 crore shares, totaling Rs 4,499.00 crore.
Promoters will own 52.97 percent of the company after the offering, down from 63.56 percent before the IPO. On 05 November 2024, the company raised Rs 5,085 crore from anchor investors.
“Although the company has faced consistent losses, it has shown steady revenue growth. Swiggy's strategy to expand its dark store network, optimise logistics, and diversify its offerings is geared towards driving future profitability. Additionally, Swiggy is focused on accelerating its Instamart service and narrowing the market share gap with competitors like Zomato and Blinkit. We recommend ‘holding’ Swiggy shares, as the company has strong growth potential for a medium- to long-term investment horizon,” said Akriti Mehrotra, Research Analyst, Stoxbox.
The firm intends to use the net proceeds to fund a number of strategic goals. Investing in its material subsidiary, Scootsy, to pay back or partially pre-pay some loans is one of them.
The money will also help Scootsy expand its Quick Commerce business by opening Dark Stores and paying for associated licence or lease fees. Additionally, investments will be made to improve cloud infrastructure and technologies.
The business plans to spend money on brand marketing and promotional initiatives in a number of markets to increase the visibility of its platform. Lastly, some of the money raised will be set aside for general business needs and possible acquisitions to spur inorganic growth.
