Swiggy Targets Lower Valuation For November IPO: Report

Food delivery company Swiggy has reduced its valuation target for its upcoming initial public offering (IPO) to between USD 12.5 billion and USD 13.5 billion, down from an earlier goal of USD 15 billion, as per a Reuters report. 

The decision comes in response to heightened market volatility and a correction in Indian stock markets, according to Reuters sources familiar with the matter. The company, which was initially set to seek a USD 1.4 billion IPO in November, is aiming to ensure strong investor interest by leaving ample value "on the table," said one source.

Swiggy's IPO is expected to be the second-largest stock offering in India this year, following Hyundai India's debut earlier this week. Hyundai's shares saw a 7.2 per cent drop on their first day of trading, reflecting investor caution due to concerns over high valuations and a slowdown in the automotive industry. Swiggy is scheduled to list on the Mumbai exchanges by 13 November, with the IPO subscription period expected to open a week earlier, though the dates could shift slightly.

India's broader market conditions have been shaky, with the benchmark Nifty 50 index on track to post four consecutive weeks of losses, having declined 7.15 per cent from its record highs in late September. Foreign investors have been offloading shares, further pressuring valuations. Despite these challenges, the IPO market in India has remained robust, with around 270 companies raising USD 12.57 billion so far in 2024, significantly more than the USD 7.4 billion raised throughout 2023.

Backed by global investors including SoftBank and Prosus, Swiggy competes closely with Zomato in the rapidly growing food delivery sector. Both companies have recently expanded into the "quick commerce" space, delivering groceries and other essentials within minutes. Swiggy’s last funding round in 2022, led by Invesco, valued the company at USD 10.7 billion. The food delivery giant is set to begin roadshows for its IPO across various Indian cities starting on 30 October.

(Inputs from Reuters)