Swiggy, a titan in India’s food and grocery delivery industry, is all set to make its mark on the stock market with its much-awaited Initial Public Offering (IPO). Investors are buzzing with excitement as the Swiggy IPO gears up for a November 6, 2024, launch, with the company aiming to raise ₹11,327.43 crore through the offering. But before you dive in and invest, there are several crucial aspects to consider. So, what should you know before subscribing to the Swiggy IPO?
What is the Swiggy IPO?
The Swiggy IPO is Swiggy’s long-anticipated entry into the stock market, offering both fresh equity shares and shares through the offer-for-sale (OFS) route. The company is targeting a total raise of ₹11,327.43 crore, with fresh equity shares accounting for ₹4,499 crore, and ₹6,828.43 crore coming through the OFS.
Swiggy is expected to leverage the funds raised to reduce debt, bolster its technological infrastructure, and fuel the expansion of its quick-commerce arm, Instamart.
Key Dates to Mark for the Swiggy IPO
Swiggy’s IPO is fast approaching. Here are the key dates:
- IPO Open Date: November 6, 2024
- IPO Close Date: November 8, 2024
- Allotment Date: November 11, 2024
- Listing Date: November 13, 2024
With the short window for subscription, investors must be prepared to act fast.
Swiggy IPO Subscription Details: How Does It Work?
The Swiggy IPO will be open for subscription from November 6 to November 8, 2024, giving interested investors three days to buy into the offering. The company plans to issue 11.54 crore fresh equity shares as part of this IPO.
A significant portion—75%—of the IPO will be reserved for Qualified Institutional Buyers (QIBs), while retail investors will have access to only 10% of the total shares. Non-institutional and high-net-worth investors will make up the remaining 15%.
Are you wondering how many shares you should buy? Here’s what you need to know about the lot sizes and price bands.
Swiggy IPO Lot Size and Price Band: How Much Will It Cost?
Swiggy has set the price band for its IPO between ₹371 to ₹390 per share, and the lot size is fixed at 38 shares per lot. For retail investors, this means a minimum investment of ₹14,820 will be required to participate.
If you’re considering a higher stake, non-institutional investors have different requirements:
- Small Non-Institutional Investors (sNII): Minimum of 14 lots
- Big Non-Institutional Investors (bNII): Minimum of 68 lots
This tiered system provides flexibility, allowing both small and large investors to take part, depending on their risk appetite and investment strategy.
Swiggy IPO: Allotment and Listing Dates
After the subscription closes on November 8, 2024, the next big date to watch is November 11, 2024. This is when Swiggy will finalize the allotment of shares to its investors. Once this process is completed, the credit of shares to the demat accounts will happen on November 12, followed by the listing on stock exchanges by November 13, 2024.
Listing day will be crucial, as it will reveal how the market responds to Swiggy’s valuation and growth prospects. Early market sentiment is expected to be positive, given Swiggy’s strong brand and its dominance in the food delivery and quick commerce sectors.
Why is Swiggy Going Public? Utilization of IPO Proceeds
Swiggy’s decision to go public isn’t just about raising capital; it’s also a strategic move to reduce debt and invest in growth. The proceeds from the Swiggy IPO will be utilized in several key areas:
- Debt Repayment: A portion of the funds will be used to reduce Swiggy’s borrowings, particularly for its subsidiary, Scootsy.
- Expanding Quick Commerce: Swiggy plans to expand its quick-commerce segment, particularly through Instamart and dark stores.
- Tech and Infrastructure: A significant portion will go into bolstering Swiggy’s cloud infrastructure and enhancing its technological capabilities.
- Brand Awareness: Funds will also be directed towards increasing brand visibility and market penetration.
This allocation shows Swiggy’s commitment to scaling up and becoming a more profitable and efficient company post-IPO.
Swiggy’s Financial Health: What You Should Know
Before subscribing to the Swiggy IPO, it’s essential to take a closer look at the company’s financial performance. In FY24, Swiggy reported a net loss of ₹2,350.24 crore, with revenues of ₹11,634.35 crore. By Q1FY25, Swiggy’s net loss had decreased to ₹611 crore, while revenues for the same period hit ₹3,310.11 crore.
While these losses may raise eyebrows, Swiggy’s revenue growth and its strategic investments in quick commerce signal long-term potential. The IPO will play a crucial role in helping Swiggy transition towards profitability by reducing debt and funding growth initiatives.
Is Swiggy IPO Worth It? Final Thoughts
With the Swiggy IPO just around the corner, investors must weigh the risks and opportunities. Swiggy is a dominant player in India’s food and grocery delivery markets, and its push into quick commerce through Instamart gives it a strong growth trajectory. However, the company’s losses and competition from players like Zomato could pose challenges.
So, should you subscribe? The Swiggy IPO offers a compelling opportunity for those looking to invest in a market leader poised for further growth. However, it’s crucial to consider your investment horizon and risk tolerance before diving in.
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