Swiggy IPO Day 2: A Comprehensive Overview
The much-anticipated initial public offering (IPO) of Swiggy Ltd commenced on November 6, 2024, and will remain open for bidding until November 8, 2024. This two-day window provides investors with a crucial opportunity to participate in the public issue of one of India’s leading online food delivery platforms. Swiggy has set its IPO price band between ₹371 and ₹390 per equity share, aiming to raise a substantial ₹11,327.43 crore through a combination of fresh issues and offers for sale (OFS).
Initial Response and Market Sentiment
As of the second day of bidding, the Swiggy IPO has experienced a lukewarm response. According to the latest subscription status, the overall issue has been booked 0.35 times, with the retail portion seeing a slightly better uptake at 0.84 times. However, the Non-Institutional Investor (NII) segment has only been subscribed 0.14 times, and the Qualified Institutional Buyer (QIB) portion stands at 0.28 times. This tepid response has raised questions about investor sentiment towards the IPO, especially in light of recent market volatility.
Interestingly, despite the subdued subscription numbers, Swiggy’s share price has remained stable in the grey market, where it is currently trading at a premium of ₹11. Market observers attribute this steady grey market sentiment to a potential reversal trend in the Indian secondary market. However, there are concerns that Swiggy’s shares may have lost some allure due to significant selling pressure leading up to the IPO.
Grey Market Premium (GMP) Insights
The Grey Market Premium (GMP) for Swiggy’s IPO has remained unchanged at ₹11, reflecting a cautious optimism among investors. Analysts note that the stability in GMP could indicate a potential recovery if the broader Indian stock market continues its upward trajectory in the coming sessions. The grey market serves as an informal barometer for investor sentiment, and the current premium suggests that there is still interest in Swiggy’s shares despite the initial subscription figures.
Analyst Ratings and Recommendations
Several financial analysts have weighed in on the Swiggy IPO, with many assigning a ‘subscribe’ rating. Dr. Choksey FinServ highlighted Swiggy’s strategic focus on hyperlocal commerce, emphasizing its innovation-led culture and the consistent rise in Average Order Value (AOV). The company’s expansion of Dark Stores—from 301 in FY22 to 523 in FY24—positions it well to enhance user engagement and operational efficiency. With a user base of 112.73 million as of June 30, 2024, Swiggy’s growth trajectory appears robust, supported by a unified app experience that simplifies diverse service offerings.
Indsec Securities echoed this sentiment, noting that at the upper price band of ₹390 per share, Swiggy’s IPO is priced at an EV/sales ratio of 7.8x, significantly lower than its listed industry peers at 17.6x. The firm pointed out that while Swiggy’s revenue growth has been impressive, it still lags behind competitors like Zomato. Nonetheless, the fresh proceeds from the IPO are expected to bolster Swiggy’s dark store network and marketing efforts, which are critical for sustaining growth in the competitive quick commerce landscape.
Key Dates and Future Outlook
Investors looking to participate in the Swiggy IPO should note that the subscription window will close on November 8, 2024. The allotment date is tentatively set for November 9, 2024, with a possibility of an extension to November 11, 2024, if necessary. The shares are expected to be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) on November 13, 2024.
In conclusion, while the initial response to the Swiggy IPO may not have met expectations, the underlying fundamentals of the company and the broader market conditions could influence future performance. Investors are advised to conduct thorough research and consult with certified experts before making any investment decisions.
Disclaimer
The views and recommendations expressed in this article are those of individual analysts, experts, and broking companies, and do not reflect the opinions of Mint. Investors should seek advice from certified professionals before making any investment choices.