Rs 5,085 Crore Raised from Anchor Investors
Before listing into public markets, Swiggy has raised a huge Rs 5,085 crore through anchor investors. According to reports, shares were valued at Rs 390. These are the highest valuations in the price range which was set between Rs 371 and Rs 390. The anchor round included many of the most respectable names in finance, some being domestic and international institutions. Half of the amount generated by Swiggy has come from Indian investors and it mentions big brands in the investment list including names like SBI Mutual Fund, ICICI Prudential Mutual Fund, Kotak Mutual Fund, HDFC Life. Even big international finance companies such as BlackRock, Fidelity, BNP Paribas, Allianz Global also invested in the venture besides other 75.
Such strong support for Swiggy's IPO can be an encouraging sign. Many interpret this kind of support from heavyweights as a sign of confidence in the performance and the potential of Swiggy, as well as in India's food-tech space.
Swiggy's IPO Target: Rs 11,327 Crore, One of the Year's Largest
Swiggy is expecting much from this IPO by raising a total amount of Rs 11,327 crore. It consists of a primary issue of Rs 4,499 crore and an OFS totalling Rs 6,828 crore. The primary issue will help grow its operations, while the OFS will enable existing shareholders to sell a part of their stakes. Salient shareholders include some OFS shares in the hands of Prosus, Accel, Elevation Capital, Meituan, Tencent, and Swiggy co-founders Sriharsha Majety, Nandan Reddy, and Rahul Jaimini. Shares up for sale under the OFS part are in excess of 175 million.
If the IPO is successfully capped at its maximum price, then Swiggy might fetch a valuation of more than Rs 95,000 crore. That indeed will be a 6% increase from the private round that Swiggy managed in January 2022. It reflects investor trust in the company's prospects and trajectory. Swiggy's IPO is one of the largest in India this year and is expected to attract significant institutional and retail interest.
Grey Market Premium Points to Good Market Sentiment
Grey market has welcomed the offer for sale by Swiggy with its arms wide open. GMP for Swiggy stands at 5 per cent, which is nearly Rs 20 over the price band in the IPO or willing to pay around Rs 410 per share. That means the premiums are pretty high and quite positive on the market end even before listing.
Generally, this sort of GMP is interpreted as an indicator of the confidence of the market in the stock of a particular company. Swiggy's large GMP suggests that it may be a good listing, particularly because it has been attracting investors into its fold to explore the digital food and quick-commerce ecosystem in India.
Competitive Landscape: Zomato vs. Swiggy
While arch-rival Zomato is growing very rapidly, being valued at nearly Rs 2.1 lakh crore, the battles for food delivery and quick commerce between Swiggy and Zomato do not end there. Both Swiggy's Instamart and Zomato's Blinkit are in a fight for India's grocery market, which seeks a faster delivery option. Swiggy's Instamart, having consolidated its growth in a space already dominated by online retail major Flipkart, Blinkit will continue to grow under Zomato.
With growing competition, an IPO for Swiggy will be the point in time that will allow the company to raise funds in order to more strongly position itself in the market. The timing of an IPO is very significant in the case of Swiggy since it looks to capitalize on growing Indian appetite for convenience-driven delivery services.
Important Details of the IPO: Subscription Window and Timeline
Swiggy's IPO has opened up for public subscription today and would remain open till 8 November. The price band has been set at Rs 371 to Rs 390 per share and the final price will reflect investor interest in the next few days. According to market observers, a huge participation is expected from the retail investors as well, since the popularity of Swiggy and its presence in the market are well known. This is going to be an avidly contested IPO, by investors both individual and institutional; of course, seeking a small or big pie in the offering of one of the biggest food delivery platforms based out of India.
Well, being one of the big 2024, all's already in talks through this public offering by Swiggy, and in consideration of investors of local markets, as well as across various international markets, people still have great trust for how Swiggy will end and remain ahead in its time in the changing food-tech world.
So what's in store for Swiggy?
Swiggy, through the IPO proceeds, is looking to expand its services, enhance operational capabilities, and reinforce its technological structure. The funds will also propel Swiggy's instant-commerce service Instamart, which has become integral to its long-term growth strategy. Swiggy's IPO is expected to make significant strides in its market space, allowing it to compete closely with Zomato against a dynamic and fast-paced industry.
Inputs by Agencies
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