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Swiggy’s IPO Sees Strong Start with 12% Subscription on Day One

• ByStartupStory     |    November 7, 2024

Food delivery giant Swiggy witnessed a promising start to its Initial Public Offering (IPO) on Wednesday, with the issue seeing a 12% subscription on the first day of its share sale. As per the data from the National Stock Exchange (NSE), the IPO received bids for 1,89,80,620 shares, out of the total 16,01,09,703 shares on offer.

The IPO comprises a fresh issue of shares valued at Rs 4,499 crore, alongside an offer for sale (OFS) of Rs 6,828 crore. This marks Swiggy’s entry into the public market and signals its ambitions for expansion as it looks to scale its operations.

Subscription Breakdown

The retail individual investor (RII) portion of the IPO saw significant interest, with a 54% subscription as of the first day. Meanwhile, the non-institutional investor portion was subscribed at a 6% rate. This indicates strong early interest, especially from retail investors.

Anchor Investor Funding and IPO Targets

Before launching the public sale, Swiggy successfully raised Rs 5,085 crore from anchor investors on Tuesday, further bolstering investor confidence ahead of the IPO. With this, the company aims to raise Rs 11,327 crore in total from the public offering, a crucial step in funding its future growth.

Swiggy, which is based in Bengaluru, is currently valued at around $11.3 billion (approximately Rs 95,000 crore) based on the highest price estimate of the IPO. Despite this impressive valuation, Swiggy’s competitor, Zomato, which went public in July 2021, holds a market value of about Rs 2.25 lakh crore, nearly double that of Swiggy. This stark contrast underscores the highly competitive nature of India’s food delivery market.

Use of Funds

The proceeds from Swiggy’s fresh issue will primarily be directed towards bolstering its technology and cloud infrastructure, ramping up brand marketing and business promotion. In addition to these initiatives, Swiggy also plans to use part of the funds to pay down its debt and pursue inorganic growth through acquisitions and other corporate strategies.

IPO Price Range

Swiggy’s shares are being offered for public subscription in the price range of Rs 371 to Rs 390 per share from November 6-8, providing a window for investors to purchase shares in the high-demand company.

Book Running Lead Managers

The IPO is being managed by a team of prestigious book running lead managers, including Kotak Mahindra Capital Company Limited, JP Morgan India Private Limited, Citigroup Global Markets India Private Limited, BofA Securities India Limited, Jefferies India Private Limited, ICICI Securities Limited, and Avendus Capital Private Limited.

Future Prospects

Swiggy’s IPO is seen as an important step in its growth journey as it seeks to further expand its market share in India’s fast-growing food delivery and quick commerce sectors. The funds raised will enable the company to invest in key areas to drive its long-term goals of increasing operational efficiency, market reach, and consumer engagement.

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