Swiggy IPO Soon: All You Need to Know About India’s Food Delivery Giant Public Offering
Swiggy, the best food and grocery delivery service operating in India, will open its much-awaited IPO today, November 6, 2024. Swiggy will close the books on November 8 when it will look to collect substantial capital for growth on both sides-in quick-commerce and food delivery. Here is everything you need to know about Swiggy IPO, the current grey market premium (GMP), strategic growth plans, and its position against rival Zomato.
Swiggy IPO Highlights: Key Details on Price Band and Offer Size
Swiggy’s IPO has a price band between ₹371 and ₹390 per share. The company would raise about ₹4,499 crore from this IPO through fresh issues as well as an Offer-for-Sale (OFS) of 17.5 crore shares by the existing investors. This is a great opportunity for the retail investors to buy shares in one of India’s fastest growing sectors. The food delivery industry has been growing very fast because of lifestyle changes, urbanization, and a preference for convenience.
Swiggy also desires to expand its grocery delivery, especially through the Instamart quick-commerce platform because it is battling in the increasingly competitive market. Improved financial health through the influx of money, achieving Swiggy’s expansion aims, and increasing the technological strength will turn it a better-rounded competitor in this online delivery landscape.
Grey Market Premium (GMP): Market Sentiment about Swiggy’s IPO
Grey Market: Swiggy shares are trading on the grey market, the unofficial stock market for buying and selling IPO shares even before listing on the actual stock exchange. The Swiggy grey market premium stands at an estimated ₹18 a share. That’s pretty strong evidence that the shares enjoy acceptance in the market as much as the stocks are slated to list on the launch day at approximately ₹408.
However, the GMP has been volatile due to market fluctuations, and if one looks closer at the trend, it actually points out that while there might be excitement around Swiggy’s IPO, its overall trend is tempered by some broader market conditions. Hence, GMP is said to be an indicator of investor interest but changes accordingly with demand and market sentiments closer to the listing date.
How Swiggy Plans to Use IPO Proceeds for Expansion and Growth
Swiggy has identified different strategic areas to which it will allocate the proceeds from the IPO. Here is how Swiggy will deploy funds:
Debt Repayment: A portion of the proceeds will be applied for debt repayment, which would enhance Swiggy’s balance sheet as well as clear up some space for reinvestment and operational growth.
* Dark Stores: Swiggy plans to scale up dark stores, customer-facing fulfillment centers that are primarily used for Instamart. It will enable the company to support its quick-commerce grocery business as it will deliver faster and help it manage its inventory better.
* Technology Upgrades: Swiggy continuously upgrades its technology to ensure a seamless customer experience. With investments in AI, machine learning, and logistics management, Swiggy can enhance user engagement, which is crucial for sustaining its growth in a competitive market.
* Lower Advertising Cost: Creating a loyal customer base and operating service efficiently reduces advertising cost for Swiggy in the long run. Its profitability metrics will, in turn, rise.
Swiggy vs Zomato: Battle of Market Supremacy
As Swiggy heads toward its IPO, its nearest competitor in the food delivery space, which had actually gone public last year, is Zomato. The two companies have been fighting each other for years in the Indian food delivery business. While Swiggy’s IPO brings a fresh capital inflow, through which it can now invest more aggressively, it is actually gaining strong tailwinds in one particular area of competition: quick commerce.
The quick-commerce space in India is booming and Indian consumers are increasingly seeking faster delivery for their daily essentials. Another contender for this space, which acquired Blinkit from its former avatar Grofers, is Zomato. If Swiggy’s IPO goes through, the latter will be able to scale quicker, fortify Instamart, and gain an edge over it. Considering that Swiggy is now focusing on quick commerce as a core area of growth, it is looking to take a significant chunk of the grocery delivery space.
IPO Listing Date and Sentiment of the Market
An initial public offering (IPO) for Swiggy is scheduled for November 13, 2024. Investor attitude has been cautiously positive despite the mixed performance of recent Indian initial public offerings. Swiggy’s well-established brand and strategic focus on profitable expansion position it for positive listing-day performance, whereas some tech-based initial public offerings (IPOs) have underperformed because of concerns about profitability and market saturation.
Market too keeps an eye on Swiggy’s road to profitability. The firm has had a very sharp strategy towards EBITDA profitability or Earnings Before Interest, Taxes, Depreciation, and Amortization, which is showing efficient growth and cost control. That path of profitability will be able to attract long-term investors as the food and grocery delivery markets are very competitive and this metric sits at the top of their shopping list.
Why Swiggy’s Growth Potential Has Investors Excited
The IPO now unlocks the nation for the public to be invested in a new food delivery and fast-commerce landscape. While still one of the most intense races in the industry, it is no competition that stops the many strategic initiatives that Swiggy is undertaking through reduced debt, expansion in the dark store model, and upgrades in its tech stack.
The IPO will enable Swiggy to expand its market further, increase the scale of the customer base, and expand its quick-commerce service. Given the potential for robust growth in tier-2 and tier-3 cities, Swiggy is well-positioned to take a larger share of the Indian market, so it would be an attractive candidate for retail as well as institutional investors.
Swiggy’s IPO is going to be a huge play for India’s food and quick-commerce industries. Any strategic use of funds on its part as it ventures into the stock market is something that would be eyed, including its competition with Zomato and all its expansion plans into various markets.