The much-awaited Swiggy IPO is finally here, and investors are keen to know how the company will perform on the public markets. With the price band set and the bidding dates fast approaching, it’s crucial to dive deep into the specifics, especially around Swiggy IPO GMP (Grey Market Premium), which has been fluctuating in the lead-up to the issue. But what exactly is the Swiggy IPO GMP and why does it matter? Let’s break it down.
What is Swiggy IPO GMP?
The Swiggy IPO GMP refers to the grey market premium, an unofficial market where shares of a company can be traded before they are listed on the stock exchange. The Swiggy IPO GMP gives an early indication of the demand and pricing sentiment for the shares among investors. As of today, the Swiggy IPO GMP stands at ₹20 per share, which indicates a moderate premium above the issue price, signaling mixed enthusiasm from potential investors.
Why is Swiggy IPO GMP Important for Investors?
The Swiggy IPO GMP helps investors gauge how the stock might perform once listed. A high GMP suggests that the stock could debut at a premium, potentially offering quick gains. However, it’s important to remember that GMP is not always a foolproof indicator. It can fluctuate based on broader market trends, investor sentiment, and the company’s performance. So, while it’s a helpful tool, always consider it alongside other financial metrics.
Key Details of Swiggy IPO
With the IPO set to open for subscription on November 6, 2024, here are some key details you need to know:
1. Swiggy IPO Date and Timeline
The Swiggy IPO will be open for bidding from November 6 to November 8, 2024. Post the bidding period, Swiggy’s equity shares are expected to be allotted by November 11, with refunds initiated on the same day for unsuccessful bidders. The much-anticipated listing on the stock exchanges is likely to happen on November 13, 2024.
2. Swiggy IPO Price Band
The price band for the Swiggy IPO has been set between ₹371 to ₹390 per share. At the upper end of this range, the company aims to raise a staggering ₹11,327.43 crore, making it one of the largest IPOs in recent times. This valuation reflects the market’s expectations for Swiggy, especially in light of its position as a leader in both food delivery and the rapidly growing quick-commerce sector.
3. IPO Structure: Fresh Issue and Offer for Sale (OFS)
The Swiggy IPO consists of two parts:
- Fresh Issue: 11.54 crore equity shares worth ₹4,499 crore will be newly issued.
- Offer for Sale (OFS): 17.51 crore shares valued at ₹6,828.43 crore will be sold by existing shareholders.
The OFS portion involves some big-name investors offloading part of their stake, including Accel India, Tencent Cloud Europe, and Elevation Capital.
4. Swiggy IPO Lot Size
Retail investors looking to get in on the Swiggy IPO will need to purchase a minimum of 38 shares, amounting to a total investment of ₹14,820 at the lower end of the price band. This makes it relatively accessible to a wide range of retail investors.
Objectives of the Swiggy IPO
Swiggy intends to use the funds raised from the IPO for several key purposes:
- Investment in Subsidiaries: A portion will be funneled into Swiggy’s material subsidiary, Scootsy.
- Technology & Cloud Infrastructure: Swiggy plans to enhance its platform with cutting-edge tech to improve customer experience.
- Brand Marketing: Funds will also go toward boosting brand visibility and acquiring more users.
- Inorganic Growth: Swiggy aims to pursue acquisitions to expand its market reach and capabilities further.
Swiggy IPO GMP Today: What’s the Current Status?
As of today, Swiggy IPO GMP stands at ₹20 per share, meaning the grey market is valuing Swiggy at ₹410 per share, a modest premium over the issue price of ₹390. While this indicates some positive sentiment, it’s not overwhelmingly strong, which could mean investors are approaching the IPO with cautious optimism.
Should You Subscribe to Swiggy IPO?
Brokerages have shared mixed reviews regarding the Swiggy IPO. Here’s what some experts are saying:
- SBI Securities has recommended subscribing to the IPO for long-term gains, citing Swiggy’s strong market presence and potential for growth in the food delivery and quick-commerce sectors.
- On the other hand, Aditya Birla Money has advised caution due to Swiggy’s ongoing losses and high valuation, suggesting that it may not be an attractive opportunity for all investors.
Financials: Swiggy’s Growth vs. Losses
While Swiggy has shown impressive revenue growth, it has also posted significant losses. For the financial year ending March 2024, Swiggy reported a net loss of ₹2,350.24 crore on a revenue of ₹11,634.35 crore. In the first quarter of FY25, Swiggy posted a loss of ₹611.01 crore. These figures have raised concerns among some analysts about the sustainability of the company’s business model.
Final Verdict: Is Swiggy IPO Worth the Hype?
If you’re looking to invest in a company with massive growth potential in food delivery and quick commerce, Swiggy could be a strong bet. However, the Swiggy IPO GMP shows that the market’s enthusiasm is measured, with mixed reviews from experts. Investors should weigh the risks of Swiggy’s financial performance against the potential upside of investing in a tech-forward, market-leading company.
Ultimately, whether you subscribe to the Swiggy IPO will depend on your risk tolerance and investment goals. Keep an eye on the Swiggy IPO GMP as it may provide further insight into market sentiment leading up to the listing date.
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