The third quarter of the financial year 2024-2025 is going well for Initial Public Offerings (IPOs). In October, Hyundai Motor India Limited completed the largest public issue in the history of the Indian stock market successfully. Close on the heels of this public issue is another widely anticipated one from one of India’s leading food delivery and quick commerce platforms: Swiggy Limited.
Known for its strong presence alongside its competitor Zomato, Swiggy's IPO has been met with mixed sentiments among investors ever since it was announced. The Grey Market Premium (GMP), which many investors use to gain insights into listing performance, suggests a potentially subdued listing.
Overview of the Swiggy IPO
The subscription period for Swiggy Limited’s public issue was from November 6 to November 8, 2024. Despite the short period, the issue was oversubscribed by about 3.59 times, indicating strong demand. Although the IPO price band was set between Rs. 371 and Rs. 390 per share, they were ultimately allotted at the ceiling price of Rs. 390.
The total issue size of the Swiggy IPO was valued at Rs. 11,327.43 crores and involved the sale of about 29,04,46,837 equity shares. Out of this, the fresh issue component was valued at about Rs. 4,499 crores (11,53,58,974 shares) and the Offer for Sale (OFS) component was valued at Rs. 6,828.43 crores (17,50,87,863 shares).
Swiggy IPO Listing Date
After the IPO subscription period came to a close, the share allotment was finalised on Monday, November 11, 2024. Investors who were allotted the shares should get them credited to their demat account by Tuesday, November 12, 2024.
The shares of Swiggy Limited are slated to make a debut on both the Bombay Stock Exchange (BSE) as well as the National Stock Exchange (NSE) on Wednesday, November 13, 2024.
Grey Market Premium (GMP) and Listing Expectations
Swiggy's IPO saw substantial support from Qualified Institutional Buyers (QIBs), who provided the majority of the capital. Retail and Non-Institutional Investors (NIIs), however, chose to stay cautious. Some reasons for the reluctance to bid for the shares could be chalked up to the company's cash flow challenges, intense competition from Zomato, and the overall bearish market sentiment.
The Grey Market Premium (GMP), which serves as a reflection of investors’ sentiment, is seeing very tepid numbers. As of November 12, 2024, the GMP is just Rs. 1 above the issue price of Rs. 390 (a 0.26% premium). Such a minor increase in the premium suggests that the shares would either remain flat or feature a slightly discounted listing.
Conclusion
Swiggy Limited is among the fastest-growing startups in the Indian space. The IPO marks a major step in the company’s business expansion efforts. The funds raised via the public issue are proposed to be utilised for technological upgrades and establishing dark stores, which would place the company in a better position to capture a larger share of the expanding quick commerce market.
If you are a long-term investor, you could consider staying invested in Swiggy. However, it is important to note that the company may take time to establish profitability. On the other hand, short-term investors may have to brace for limited listing gains and increased volatility.
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