The market is widely interested in the Swiggy IPO, where brokerage houses such as SBI Securities and Bajaj Broking have been advising clients to “Subscribe” it, especially long-term. SBI Securities said the issue is well-priced when compared with peer companies such as Zomato. They felt Swiggy’s valuation seemed reasonable for its market leadership and growth prospects.
Swiggy has priced the shares between Rs 371-390, and based on this, its value would hover around USD 11.3 billion. The head of Swiggy’s Food Marketplace, Rohit Kapoor, said, “The final valuation is entirely dependent upon the close of the offering on 8th November.”
Important Observations and Suggestions
Valuation and Pricing: IPO has been priced with competitive advantage, and Grey market premium, GMP was quoted at Rs 12 as a small listing gain was approximated to be 3% in the gray market. It has decreased from last month’s Rs 25 and is seen tamed up for quick listings.
Growth and Expansion: Core strengths were marked on revenue growth of 42.4% from FY 2022 to FY 2023 and that 500 cities are currently serviced across India by Bajaj Broking from Swiggy.
Analysts also put out warnings about potential risks, which include Swiggy managing its dark store network well and maintaining the user base. Any wrong move will hit its cash flow as well as the business.
Swiggy’s recent financials are depicting losses narrowing. For the June 2024 quarter, it had a loss of Rs 611 crore compared with Rs 564 crore for the same period last year. The trend may be interesting to long-term investors looking for growth potential from the food delivery and quick commerce businesses in which Swiggy operates.
