Indian online food and grocery delivery giant Swiggy is preparing for its initial public offering (IPO) scheduled to launch in November 2024. The move has generated considerable interest among retail investors, financial analysts and large institutional investors. With a fixed price band, notable grey market premium (GMP) activity and specific investment targets, the Swiggy IPO is becoming one of the most anticipated offerings of the year. Below are the key details and 10 essential things to know before considering investing in Swiggy’s IPO.
1. Swiggy IPO Dates
The Swiggy IPO will open for public subscription on November 6, 2024. Investors can submit their applications till November 8, 2024. Given the high demand expected from institutional and retail investors alike, potential buyers need to be prepared to act in a timely manner in this limited period.
2. Swiggy IPO Price Band
The IPO price band has been set between ₹371 and ₹390 per share. At the upper end of the price range, Swiggy aims to raise around ₹11,327.43 crore. This pricing has made Swiggy’s IPO one of the key listings in India’s tech and e-commerce sectors this year.
3. Swiggy IPO Size and Structure
The IPO size comprises a combination of fresh issue of shares and an offer for sale (OFS). Specifically:
Fresh issue: Around 11.54 crore equity shares aggregating to ₹4,499 crore.
Offer for Sale (OFS): Around 17.51 crore shares valued at ₹6,828.43 crore.
These funds will support Swiggy’s expansion, tech investments, and other strategic goals, making the offering attractive for investors looking for potential growth in the e-commerce and delivery segments.
4. Swiggy IPO Lot Size and Investment Amount
Retail investors will have to buy shares in lots. Each lot consists of 38 shares, and at the upper price band of ₹390, the minimum investment for retail participants will be around ₹14,820. This price point is meant to attract both small retail investors and large institutional players, providing a balanced entry cost.
5. Investors in Offer for Sale (OFS)
The OFS portion will see some of Swiggy’s key early investors sell part of their holdings. These include:
Accel India IV (Mauritius) Limited
Apoletto Asia Limited
Alpha Wave Ventures, LP
DST Euroasia V B.V.
Tencent Cloud Europe B.V.
Norwest Venture Partners VII-A Mauritius
By selling shares through the OFS, these early investors are partially monetizing their investment in Swiggy, while allowing new participants to join the company’s growth trajectory.
6. Swiggy IPO Reservation Categories
Swiggy’s IPO has a well-defined allocation structure to ensure participation from a wide range of investor types:
Qualified Institutional Buyers (QIBs): 75% of shares.
Non-Institutional Investors (NIIs): 15% of shares.
Retail Investors: 10% of shares.
Additionally, Swiggy has reserved 750,000 shares for employees at a discount of ₹25 per share. This move rewards employee loyalty and ensures their stake in the company’s success.
7. Swiggy IPO Objectives
Swiggy has earmarked the IPO proceeds for several strategic initiatives:
Investment in Subsidiary: Funds will be used to strengthen Swiggy’s subsidiary Scootsy.
Technology and Cloud Infrastructure: Improvements in technology will enhance operational efficiency and service reliability.
Brand Marketing and Business Promotion: Funds will help increase Swiggy’s visibility and brand recall.
Inorganic Growth: Swiggy plans to allocate some funds for potential acquisitions, leading to further growth in the competitive delivery market.
General Corporate Objectives: A portion of the proceeds will support regular corporate operations, improving Swiggy’s financial health.
8. IPO Allotment and Listing Dates
After the subscription period, Swiggy’s IPO allotment date is set for November 11, 2024, with shares expected to be credited to investors’ demat accounts on November 12, 2024. The official listing on the stock exchanges is anticipated to take place on November 13, 2024. Refunds for investors who do not get an allotment will be processed on the same day.
9. Book Running Lead Managers (BRLMs) and Registrars
Several well-known senior managers oversee the Swiggy IPO to guarantee a smooth and fruitful listing process:
JP Morgan India, Citigroup Global Markets India, Jefferies India, Avendus Capital, Kotak Mahindra Capital Company, BofA Securities, and ICICI Securities are the book running lead managers.
Registrar: Link Intime India Pvt Ltd has been appointed as the official registrar, which handles investor applications, allotments, and refunds.
10. Swiggy IPO Grey Market Premium (GMP)
The Swiggy IPO is currently trading at a grey market premium (GMP) of around ₹22 per share, which values each share at around ₹412 in the grey market. This GMP reflects positive sentiment among market observers, with the premium being
About Swiggy: Financial Overview and Business Model
Swiggy is one of India’s leading online food and grocery delivery platforms, whose business model emphasizes convenience in hyperlocal deliveries. However, the company has faced financial challenges, reporting consolidated net losses in the last three fiscal years. For the fiscal year ending March 2024, Swiggy posted:
Net loss: ₹2,350.24 crore.
Revenue: ₹11,634.35 crore.
Despite these losses, Swiggy’s revenues indicate strong growth, while its ongoing investments in technology and infrastructure point towards achieving profitability in the future.
Frequently Asked Questions
Frequently Asked Questions
What is the price band of the Swiggy IPO?
The price band has been set between ₹371 and ₹390 per share.
What is the minimum investment amount for the Swiggy IPO?
The minimum investment amount for retail investors is ₹14,820 for a lot of 38 shares.
When will Swiggy shares be listed on the stock exchange?
Swiggy shares are expected to be listed on November 13, 2024.
What are the objectives of the Swiggy IPO?
Swiggy aims to fund its technology infrastructure, brand promotions, ancillary investments and potential acquisitions from the IPO proceeds.
Who is managing the Swiggy IPO?
Kotak Mahindra Capital, Citigroup Global Markets and others are the book-running lead managers, while Link Intime India Private Limited is the registrar.
What is the grey market premium (GMP) for Swiggy IPO?
The current GMP for the Swiggy IPO is ₹22 per share, indicating positive market sentiment.
Conclusion
Swiggy’s IPO is a significant event in India’s tech and e-commerce sector. With a structured pricing model, a large offering size, and clear strategic goals for fund allocation, the IPO attracts a broad spectrum of investors. Although the company is facing profitability challenges, the IPO may attract investors interested in Swiggy’s growth potential and market leadership in food and grocery delivery. However, investors should consider their risk tolerance, especially given Swiggy’s recent financial losses.
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