Swiggy is set to launch its much-awaited public offering on Wednesday, November 6. The company will be offering its shares in the range of Rs 371-390 per share for which investors can apply for a minimum of 38 equity shares and its multiples thereafter. The company issue can be subscribed till Friday, November 8.
The food-tech player's Rs 11,327 crore IPO will be India's sixth largest IPO after Hyundai Motor India, Life Insurance Corporation of India (LIC), One97 Communications (Paytm), Coal India and Reliance Power. Interestingly, all these issues have disappointed investors on their listing, failing to deliver a strong listing pop.
Investors have been keenly waiting for Swiggy's mega IPO but are also baffled if it is headed for the similar big-IPO jinx or not. Analysts, on the other hand, believe that Swiggy shall be a long-term bet for high-risk investors considering current market sentiments and absence of profitability in its balance sheet.
Swiggy is a prominent player in the e-commerce and food delivery space and has demonstrated steady top-line growth, but it remains loss-making with a negative P/E ratio, raising potential concerns for conservative investors. However, the IPO valuation appears reasonable when evaluated against other metrics, said Shivani Nyati, Head of Wealth at Swastika Investmart.
"Given the current market conditions, both the subscription and listing performance could face added pressure. Investors should consider Swiggy’s long-term growth potential alongside its current profitability challenges, making this IPO more aligned with those comfortable with high-risk exposure and a longer investment horizon," she added.
The grey market premium for Swiggy continues to remain range-bound amid the jittered market sentiments. Last heard, Swiggy was commanding a grey market premium (GMP) of Rs 20 per share, suggesting a mild pop of merely 5 per cent over the upper end of the price band. However, some sources suggest that Swiggy's GMP has fallen in the single digits lately.
Investor sentiment in the primary markets has been dampened by the underwhelming performance of Hyundai Motor India’s IPO, the largest in India’s history, amid a sharp correction seen in markets during October. Broad-based volatility in the markets is likely to persist, notes Sugandha Sachdeva, Founder of SS WealthStreet.
"Markets are currently experiencing a cyclical time-wise and price-wise correction," Sachdeva said. "The IPO market is not the space for quick gains right now, as many mid-cap and small-cap stocks have seen steep corrections, and valuation concerns persist. A cautious approach is warranted for a quarter or two before we can expect a decent recovery in primary markets."