Mon Nov 04 17:28:10 UTC 2024: ## Swiggy IPO Faces Skepticism Amidst Continued Losses
**New Delhi, Nov 4 (IANS):** Industry experts and brokerages are advising investors to steer clear of the upcoming Swiggy IPO, scheduled for November 6, citing the company’s continued financial losses and concerns about its growth outlook.
Swiggy, the food and grocery delivery giant, aims to raise approximately Rs 11,327.43 crore through its IPO, which includes a fresh issue of shares worth Rs 4,499 crore and an offer-for-sale of shares worth Rs 6,828.43 crore.
However, concerns remain about the company’s financial performance. Swiggy has reported net losses for the past three fiscal years, totaling Rs 3,628.90 crore in FY22, Rs 4,179.31 crore in FY23, and Rs 2,350.24 crore in FY24. While revenue has grown, driven by expansions into Quick Commerce, Genie, and Swiggy Minis, the company continues to struggle with high operational costs.
“Given Swiggy’s current financial position, competitive pressures, associated risks, and valuation, its IPO appears overvalued,” said SAMCO Securities in a note to investors.
The brokerage firm further warned that the company’s future profitability hinges on effectively managing expenses and generating sufficient revenue growth. Failure to achieve this balance could lead to substantial losses in the coming years.
Bajaj Broking also echoed concerns about Swiggy’s competitive landscape, citing intense rivalry from Zomato, Zepto, and new market entrants. The brokerage firm added that Swiggy’s heavy reliance on revenue from the top 50 Indian cities and the potential impact of changing food delivery regulations present significant challenges.
Despite these concerns, Bajaj Broking suggests investors consider a long-term investment in Swiggy, acknowledging its potential for growth.
However, with financial performance under scrutiny and several risks looming, investors are urged to carefully evaluate the situation before deciding whether to participate in the highly anticipated Swiggy IPO.
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