Swiggy IPO Opens on November 06: Financials Insights and Market Sentiment

Swiggy’s initial public offering (IPO) is set to open on Wednesday, November 6, 2024, with shares priced between ₹371-390 per share. 

Investors must apply for a minimum of 38 shares and multiples of that. The IPO, which closes on Friday, November 8, aims to raise ₹11,327.43 crore. This includes a fresh issuance of ₹4,499 crore and an offer-for-sale (OFS) of 17.5 crore shares worth ₹6,828.43 crore from existing shareholders. 10% of shares are reserved for retail investors, and 7.5 lakh shares are earmarked for Swiggy employees. Listing is scheduled on both BSE and NSE on November 13, with allotments confirmed by November 12.

Company Overview

Founded in 2014, Swiggy has grown into a well-known name in the food-tech industry. The company’s platform allows users to easily search, order, and pay for food, groceries, and household items, all through a single app. These orders are fulfilled by Swiggy’s extensive network of on-demand delivery partners. The company has a reputation for innovation in the hyperlocal commerce space, and it uses this network to test new services and gauge demand.

Grey Market Sentiment

Swiggy IPO GMP, a measure of anticipated demand in the unofficial market, currently stands at ₹15 per share, indicating a 4% premium over the IPO’s upper price limit.

Swiggy Limited Financial Information (Restated Consolidated)

Financial Metrics and Valuation

Note:

• The pre-IPO EPS is calculated using the current shareholding before the issue (as stated in the RHP) and the latest fiscal year earnings available as of March 31, 2024.
• The Post-Issue EPS is based on the shareholding after the issue and the annualised earnings for the quarter ending June 30, 2024, as reported in the RHP.

Objectives of the Swiggy IPO

The funds raised from Swiggy’s IPO will be used for the following purposes-

• Repaying Debts: Invest in Scootsy, a key subsidiary, to pay off part or all of its current borrowings.
• Expanding Quick Commerce: Invest in Scootsy to grow Swiggy’s Quick Commerce segment by setting up Dark Stores and covering lease or license costs for these locations.
• Technology Upgrades: Invest in enhancing Swiggy’s technology and cloud infrastructure.
• Marketing and Brand Promotion: Allocate funds to boost brand awareness and visibility across different service segments.
• Inorganic Growth: Reserve funds for future acquisitions and general corporate needs.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.