Tue Nov 05 07:38:27 UTC 2024: ## Swiggy’s IPO Opens Amidst Concerns Over High Valuation and Losses

**Mumbai, November 05, 2024:** Food delivery platform Swiggy’s much-awaited IPO opens for bidding on November 06, aiming to raise Rs 11,327.43 crore. The IPO, with a price band of Rs 371-390 per share, will close on November 08.

While investors anticipate the listing, several concerns have been raised regarding the company’s high valuation and persistent losses. Aditya Birla Money, in a research report, recommends an “Avoid” rating citing “reported negative” cash flows and ongoing losses. Bajaj Broking also highlighted the aggressive pricing and negative P/E based on projected FY24 and FY25 earnings.

Swiggy’s valuation has been slashed from $15 billion to $11.3 billion before the IPO. The company’s quick commerce (Instamart) business, which operates with a negative CFO, has also attracted scrutiny. Concerns regarding the sustainability and unfair practices of Instamart have been raised by FMCG distributors with the Competition Commission of India (CCI), potentially impacting future growth.

The IPO will see 75% of the issue allocated to qualified institutional buyers, 15% to non-institutional investors, and only 10% reserved for retail investors.

Despite these concerns, the IPO is expected to be met with significant interest. The grey market is reflecting a 5% premium, hinting at a flattish debut on November 13.

Meanwhile, ACME Solar Holdings, a renewable energy company, is also launching its IPO on November 06, aiming to raise Rs 2,900 crore. The IPO, with a price band of Rs 275-289 per share, is expected to be allotted on November 11 and listed on November 13.

Read More