Mon Nov 04 14:08:25 UTC 2024: ## Swiggy’s IPO Opens Amidst Mixed Sentiment: Investors Cautious Despite Strong Demand

**Bengaluru, India -** Food and grocery delivery giant Swiggy is set to launch its initial public offering (IPO) on Wednesday, November 6th, 2024, with a price band of Rs 371 to Rs 390 per share. The IPO, aiming to raise Rs 11,300 crore, will conclude on November 8th.

However, despite strong demand from institutional investors, the grey market activity suggests a less enthusiastic reception. Unlisted shares of Swiggy are trading at a mere 4.87% premium, indicating a cautious approach from individual investors.

**Mixed Signals from Market Experts:**

While analysts at Bajaj Broking recommend a ‘Subscribe for Long Term’ rating, they highlight Swiggy’s consistent financial losses over the past three years. The company’s average EPS is minus Rs 14.90, and the issue is priced at a P/BV of 11.60, which some experts deem aggressive.

Comparisons with Zomato, Swiggy’s competitor, are also causing concern. Zomato boasts a stronger market traction and profitability, leading some analysts to advise investors to prefer Zomato shares over the Swiggy IPO.

**IPO Proceeds and Future Plans:**

Swiggy plans to utilize the proceeds from the IPO for various initiatives, including:

* Debt repayment for subsidiary Scootsy
* Expansion of the Dark Store network in the quick commerce segment
* Investments in technology and cloud infrastructure
* Brand marketing and business promotion
* Inorganic growth and general corporate purposes

**Early Investors Exit with Big Returns:**

The IPO includes an Offer for Sale (OFS) of Rs 6,800 crore, allowing early investors like Accel, Elevation Capital, and Norwest Ventures to exit with significant returns, some achieving up to 35 times their initial investment.

**Conclusion:**

Swiggy’s IPO is a significant event in the Indian market. While the company holds a strong position in the food delivery space, the ongoing financial losses and concerns regarding profitability have created mixed sentiment amongst investors. The success of the IPO will depend on the company’s ability to leverage its resources and achieve sustainable profitability in the highly competitive market.

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