Tue Nov 05 13:53:13 UTC 2024: ## Swiggy’s IPO Faces Uncertainty Amidst Market Jitters

**New Delhi:** Food delivery giant Swiggy is set to launch its much-awaited initial public offering (IPO) on Wednesday, November 6. The company will offer its shares in the range of Rs 371-390 per share, with a minimum subscription of 38 shares. The IPO, seeking to raise Rs 11,327 crore, will be India’s sixth largest IPO, following a string of disappointing large-scale offerings.

While investors have been eagerly awaiting Swiggy’s IPO, concerns regarding its profitability remain. Swiggy has demonstrated steady top-line growth in the e-commerce and food delivery space but is yet to achieve profitability, raising potential concerns for conservative investors.

“Swiggy’s IPO valuation appears reasonable when compared to other metrics,” said Shivani Nyati, Head of Wealth at Swastika Investmart. However, she cautioned that given the current market conditions, subscription and listing performance could face pressure. “Investors should consider Swiggy’s long-term growth potential alongside its current profitability challenges,” she added, suggesting the IPO might be more suitable for investors comfortable with high-risk exposure and a longer investment horizon.

The grey market premium (GMP) for Swiggy has remained range-bound, with reports suggesting a recent decline to single digits. This suggests a potential for a mild listing pop of around 5% over the upper end of the price band, but sentiment remains subdued due to the recent poor performance of large IPOs like Hyundai Motor India.

The broader market is experiencing a correction, with investors adopting a cautious approach. Sugandha Sachdeva, Founder of SS WealthStreet, stated that the IPO market is currently not a space for quick gains, with a number of midcap and smallcap stocks experiencing sharp corrections and valuation concerns. “One needs to have a cautious approach for a quarter or two, before we see a recovery in the primary markets,” she advised.

Despite these concerns, Swiggy’s long-term growth potential remains a key factor attracting investors. However, the success of the IPO will depend on factors including market sentiment, investor appetite, and the company’s ability to navigate the current challenging economic environment.

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