Swiggy IPO: Check key dates, price band, latest GMP & analyst views

The initial public offering of Swiggy is set to open on Wednesday, November 6 and the food-tech player is slated to offer its shares in the range of Rs 371-390 apiece. Investors can apply for the issue for a minimum of 38 equity shares and its multiples thereafter until Friday, November 8.

The Rs 11,327.43 crore IPO of Swiggy includes a fresh shares sale of Rs 4,499 crore and an offer-for-sale (OFS) of up to 17.50 crore equity shares amounting to Rs 6,828.43 crore by its existing shareholders. The diversified food-tech player has a 10 per cent reservation for retail investors and 7.5 lakh equity shares for the eligible employees of the company.

Founded in 2014, Swiggy provides its users with an easy-to-use platform that they can access via a single app to search, select, order, and pay for food, grocery and household goods and have orders delivered to their homes via an on-demand delivery partner network.

Amid the rising volatility in the listed market, the grey market premium (GMP) of Swiggy has taken a strong hit. Swiggy is currently commanding a grey market premium of Rs 15 per share, suggesting a listing pop of merely 4 per cent over the upper end of the price band. The GMP in the unofficial market stood at Rs 25 before the special Muhurat trading session.

Kotak Mahindra Capital, Citigroup Global Markets India, Jefferies India, Avendus Capital, JP Morgan India, BofA Securities India and ICICI Securities are the book running lead managers of the Swiggy IPO, while Link Intime India is the registrar for the issue. Shares of the company shall be listed on both BSE and NSE on Wednesday November 13 and allotment will be out by November 12.

Swiggy is well recognized as a leader and a pioneer in hyperlocal commerce innovation. The company leverages its network of users and partners to assess market attractiveness and demand for new offerings through targeted tests, said SBI Securities. Its unified app, growing offerings and wide network of partners drive greater selections and faster delivery times, enhancing the user experience, it said.

"Swiggy, is valued at price/sales, EV/sales and P/BV multiple of 7.8 times, 7.3 times and 7.1 times respectively of its FY24 financials on post issue capital. While comparing with Zomato, the issue appears to be fairly priced on all these parameters," SBI Securities added with a subscribe for long term recommendation for the issue.

Swiggy's upcoming IPO represents both a critical opportunity and a formidable challenge. The quick commerce market is projected to grow at a CAGR of 148-169 per cent from 2018 to 2023, providing a substantial opportunity for Swiggy. However, achieving profitability will require significant investments in infrastructure, technology, and delivery networks, said InCred Equities.

"Investors may adopt a long-term perspective, given the tech-driven nature of Swiggy’s business model. However, the journey to profitability appears challenging, especially with deep-pocketed competitors entering the market and intensifying price pressures," it added.

While Swiggy aims to expand services and partnerships, reducing discounts may impact customer loyalty, and relying heavily on advertising and premium offerings might not be sufficient to drive profitability. Despite efforts to improve operational efficiency, the intense competition and current negative financial metrics raise concerns about long-term viability, said Arihant Capital.

"At the upper end of the price band, the issue is valued at a negative P/E multiple of 37.40 times based on FY24 EPS of Rs -10.5. We are recommending 'subscribe for aggressive investors' to this issue," it added.