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Swiggy Cuts IPO Valuation to $11.3 Billion as Market Conditions Weigh; BlackRock and CPPIB to Invest in Second-Biggest Offering of 2024

• ByStartupStory     |    October 28, 2024

Indian food delivery giant Swiggy has reduced its initial public offering (IPO) valuation to $11.3 billion, marking a 25% decrease from its initial target of $15 billion, according to two sources on Sunday. This move comes in response to volatile market conditions and a subdued IPO reception for Hyundai India, which has impacted investor sentiment.

The Swiggy IPO, which aims to raise $1.4 billion, is set to be the second-largest stock offering in India this year, following a strong performance from the nation’s IPO market. Global investment firms BlackRock and Canada Pension Plan Investment Board (CPPIB) have committed to investing in the offering. Requests for comment from Swiggy, BlackRock, and CPPIB went unanswered outside of business hours.

Indian equities have faced consistent pressure, with the benchmark Nifty 50 index experiencing its longest losing streak since August 2023, dropping more than 8% from record highs in late September. The debut of Hyundai India shares, which declined 7.2% on their first trading day last week, revealed a cautious attitude from retail investors regarding high valuations.

A source with direct knowledge of Swiggy’s decision shared insights on the valuation cut, noting that the company aims to prevent a tepid market response to its IPO amid global uncertainties, including the upcoming U.S. presidential election on November 5. “Swiggy does not want a ‘bad IPO,’” said the source. The food delivery platform, which was last valued at $10.7 billion in a 2022 funding round led by Invesco, made the adjustment after discussions with investors.

Swiggy is supported by SoftBank and Prosus and operates in competition with Zomato in India’s fast-growing food delivery sector. Both companies are making significant investments in the quick-commerce space, which promises ultra-fast delivery of groceries and other essential items within a 10-minute window.

Despite current market challenges, India’s IPO sector remains robust, with approximately 270 companies raising a total of $12.57 billion this year, a significant increase from the $7.4 billion raised in 2023.

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