Fri Nov 08 04:40:00 UTC 2024: ## Swiggy IPO Closes with Moderate Subscription: Investors Cautious Amid Competition

**Bengaluru-based food delivery giant Swiggy concluded its initial public offering (IPO) on Friday, November 8, after attracting moderate interest from investors.** While the company raised ₹5,085.02 crore through an anchor book on November 5, the overall subscription levels remained below expectations.

**The IPO, priced within a band of ₹371 to ₹390 per share, saw a final subscription of 47% across all categories.** Retail investors showed the most enthusiasm with a subscription rate of 91%, while qualified institutional buyers (QIBs) subscribed at 46%. However, non-institutional investors participated at a sluggish 16%.

**Analysts attribute the lukewarm response to concerns surrounding Swiggy’s competitive landscape.** While the company boasts a strong market position, competitors like Zomato and Zepto have gained ground in recent years, particularly in the fast-growing quick commerce sector.

**Mohit Gulati, CIO of ITI Growth Opportunities Fund, highlighted Swiggy’s “hare and tortoise” dilemma.** After initially dominating the market, he believes Swiggy has become complacent, leading to a loss of market share. He also cautioned about Swiggy’s valuation, suggesting it deserves to trade lower than Zomato due to these factors.

**Swiggy plans to use the proceeds from the IPO to expand its network of dark stores, invest in technology, and fund marketing efforts.** The company aims to maintain its dominance in food delivery while also scaling its quick commerce business, which has been a major source of competition.

**Despite the moderate subscription, brokerage firms remain optimistic about Swiggy’s long-term prospects.** They believe the company’s growth potential, coupled with its strong brand recognition and established infrastructure, warrants a “Subscribe for long-term” rating.

**However, investors are advised to proceed with caution, considering the challenging competitive environment and Swiggy’s ongoing losses.** The company’s ability to navigate this competitive landscape and achieve profitability will be crucial in determining the success of its IPO.

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