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  3. Swiggy $1.4 bln IPO opens for orders as Indian stocks lose some of thei…

Swiggy $1.4 bln IPO opens for orders as Indian stocks lose some of their appeal

6 Nov 2024

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Key Takeaways

Swiggy’s IPO faces cautious retail demand, reflecting broader market challenges and Swiggy’s profitability issues.


Swiggy’s IPO faces cautious retail demand, reflecting broader market challenges and Swiggy’s profitability issues.


Swiggy

Swiggy

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Expert Analysis

Swiggy $1.4 bln IPO opens for orders as Indian stocks lose some of their appeal.

Expert Analysis:

  • IPO Valuation and Market Sentiment: Swiggy’s $1.4 billion IPO sees limited retail interest despite twice valuation cuts amid cooling momentum in Indian stocks.

  • Low Grey Market Premium: Swiggy’s grey market premium is just 5% above the top price band, indicating subdued pre-listing demand, says Mahesh Ojha of Hensex Securities.

  • Anchor Investor Support: Anchor investors, including Fidelity and Norway's sovereign wealth fund Norges, purchased shares worth $605 million in Swiggy's IPO.

  • Swiggy’s Valuation Cut: Swiggy reduces its valuation by 25% to $11.3 billion to avoid a "bad" debut.

  • Market Position: Swiggy holds a strong No. 2 position in India’s food delivery market with a 34% share, behind Zomato's 58%. In quick commerce, Swiggy's Instamart holds 20-25%, while Zomato’s Blinkit leads with 40-45%, according to brokerage estimates.

Publisher:Reuters