Swiggy Ltd. IPO

The much-anticipated Swiggy Ltd IPO opened for bidding on 6th November 2024, with a three-day subscription window scheduled to close on 8th November 2024. The online food delivery giant has set its IPO price band at Rs 371 to Rs 390 per share, aiming to raise Rs 11,327.43 crore through a combination of fresh issues and offers for sale (OFS).

Grey Market Premium (GMP)
Swiggy's shares are currently trading at a premium of Rs 11 in the grey market, showing no change from the previous day’s grey market premium (GMP). Market analysts attribute the stagnant GMP to recent volatility in the Indian stock market, which saw selling pressure leading up to Swiggy’s IPO launch. However, analysts are optimistic that if the Indian markets continue their recovery, Swiggy’s GMP could see an uptick in the coming sessions.

Subscription Status

As of 10:45 am on the second day of bidding, Swiggy’s IPO subscription has seen a modest 0.15 times overall booking. The retail portion of the IPO has been subscribed 0.68 times, while the non-institutional investor (NII) category has only received 0.09 times subscription.

Financial Performance

Swiggy’s financial performance has shown significant revenue growth but persistent losses. In FY22, the company reported a total income of Rs 6,119.78 crore alongside a net loss of Rs 3,628.90 crore.

For FY23, revenue grew to Rs 8,714.45 crore, though net losses also rose to Rs 4,179.31 crore. FY24 saw a further income increase to Rs 11,634.35 crore, while net losses reduced to Rs 2,350.24 crore. In Q1 FY25, Swiggy reported an income of Rs 3,310.11 crore and a net loss of Rs 611.01 crore.

These figures indicate that while Swiggy’s revenue trajectory has been positive, the company has struggled to achieve profitability. This ongoing trend of financial losses has made some analysts wary. Bajaj Broking highlights that, despite the company's growth, it has consistently posted negative cash flows, which poses risks to prospective investors. "We advise caution due to the reported negative cash flows and the company's continuing losses," says Bajaj Broking.

Further caution comes from Aditya Birla Capital, which cites Swiggy’s valuation as a key concern. At a valuation multiple of 7.7 times FY24 price-to-sales, the company is considered slightly overvalued. "Even though Swiggy has adjusted its valuation downwards, we still recommend investors to avoid this IPO due to the ongoing losses and high valuation," Aditya Birla Capital commented.

IPO Timeline and Key Dates

The Swiggy IPO will remain open until 8th November 2024, giving investors a final chance to evaluate the opportunity.

The IPO allotment date is expected to be on 9th November 2024. In the event of a delay, the share allocation may extend to 11th November 2024. The Swiggy IPO is set for listing on the BSE and NSE, with the anticipated listing date of 13th November 2024.