MUMBAI: The initial public offering (IPO) of Swiggy Limited saw significant demand, with the issue subscribed 3.59 times by the end of its three-day bidding period on Friday.
The Rs 11,327.4 crore issue received 57.53 crore subscriptions, against the 16.01 crore shares on offer, according to exchange data.
As with other major IPOs, interest was led by qualified institutional buyers (QIBs), who oversubscribed their portion by 6.02 times.
The segment for retail individual investors (RIIs) was booked 1.14 times, while the quota for non-institutional investors (NII) fetched 41% of its targeted subscription.
On Tuesday, Swiggy announced that it had raised Rs 5,085 crore from anchor investors. The IPO includes a fresh issue of shares worth Rs 4,499 crore, alongside an offer for sale (OFS) amounting to Rs 6,828 crore.
The Bengaluru-based company has set a price range of Rs 371-390 per share, valuing Swiggy at approximately 11.3 billion dollars(around Rs 95,000 crore) at the upper end of the price band.
However, Swiggy's shares are anticipated to make a muted debut on the stock exchanges next week, in line with trends seen in the grey market. The food-tech giant's grey market premium (GMP) has steadily declined amidst a downturn in India’s equity markets and concerns over Swiggy’s journey to profitability.
As of the latest data, Swiggy shares were commanding a GMP in the range of Rs 1-2, implying a marginal listing gain of just 0.2-0.5 per cent.
While many analysts have rated the IPO as a ‘subscription for the long-term’, some have advised caution. “As of the fiscal year 2024, Swiggy Limited continues to operate at a loss, in contrast to its competitor, Zomato Limited, which has recently achieved profitability. Given Swiggy’s current financial position, competitive pressures, associated risks, and valuation, its IPO appears overvalued. Therefore, we advise investors to AVOID this IPO until the company’s financial performance and growth outlook improve,” stated SAMCO Securities in a note.
Swiggy’s IPO marks India’s sixth largest, following Hyundai Motor India, Life Insurance Corporation of India (LIC), One97 Communications (Paytm), Coal India, and Reliance Power. Notably, previous large IPOs have generally underperformed for investors on listing day.