Food delivery and grocery major Swiggy’s initial public offering has been oversubscribed by 3.59 times after a tepid response in the first two days.
The qualified institutional buyers (QIBs) portion was booked 6.02 times — the highest, NII portion was booked 41 per cent and the retail investor’s portion was subscribed 1.14 times. The employees’ book was subscribed 1.65 times.
The ₹11,300-crore IPO comprises fresh capital raise of ₹4,499 crore and an offer for sale (OFS) of 17.51 shares worth ₹6,828 crore. Swiggy IPO price band has been set at ₹371-390 per share.
The food delivery giant has raised ₹5,085 crore from institutional investors, including Fidelity and Blackrock, with sizeable participation from domestic investors.
At the upper price band, Swiggy’s valuation is estimated at around ₹95,000 crore. In comparison, rival Zomato, which went public in July 2021, currently holds a market valuation of ₹2.25 lakh crore.
Swiggy IPO GMP is indicating a muted listing gain as the shares of the company are commanding a GMP in the price range of ₹1-2, according to IPO Watch and Investor gain which track the gray market activities.
Q-Comm segment
Swiggy has a 34 per cent market share in food delivery compared to Zomato’s 58 per cent, while in quick commerce Swiggy’s Instamart has 20-25 per cent share, and Zomato’s Blinkit has an estimated 40-45 per cent share, according to brokerage estimates.
The company is betting big on enhancing quick commerce segment as it plans to allocate nearly ₹1,179 crore to its Instamart business. The company will invest ₹755.4 crore in expanding its dark store network, while lease and license payments for dark stores would amount to ₹423.3 crore. At the end of the June quarter, Swiggy Instamart had 557 dark stores. The fresh investment will take this number to 741.
Swiggy reported an operating revenue of ₹3,222 crore in the June quarter, with its net loss up at ₹611 crore from ₹564 crore a year ago. During the same period, Instamart clocked a gross order value (GOV) of ₹2,724 crore and revenue of ₹403 crore.