Swiggy IPO: Retail portion subscribed 84%, overall 35% shares allotted

Food delivery and quick commerce platform Swiggy’s Initial Public Offering (IPO) was subscribed only 35% on the second day of bidding as broader market indices slipped in red. 

Sriharsha Majety-led Swiggy witnessed the quota reserved for employees being subscribed 1.15 times by the end of bidding on the second day. Retail investors subscribed to 84% of the shares. 

According to data from the Bombay Stock Exchange (BSE), non-institutional investors purchased 14% of their allocated shares, and qualified institutional buyers’ (QIBs) part was booked at 28%.  

As of the second day, Swiggy’s IPO received bids for 5.57 crore shares, amounting to 35% of the total issue size. The issue was subscribed 12% on day one.

Swiggy, which is set to list on Indian stock markets on November 13, initially aimed for a valuation of approximately $15 billion, but later updated its RHP to seek a valuation of around Rs 87,000 crore or about $11.3 billion at the upper price band. 

“Swiggy’s decision to lower its valuation leaves some upside room for the investors, we still recommend an AVOID recommendation to this issue due to the “reported negative” cash flows and ongoing losses, alongside a slightly high valuation of 7.7x FY24 price-to-sales,” noted Aditya Birla Money in a research report dated Nov 4. 

It raised nearly Rs 5,085 crore (about $605 million) from anchor investors, which included life insurance and mutual fund arms of HDFC, ICICI, and SBI. The anchor book, which witnessed participation from over 75 key domestic mutual funds, also saw bids from global mutual fund investors like Astrone Capital, Fidelity, and Blackrock.

Swiggy plans to raise close to Rs 11,700 crore in its IPO which will include fresh issue of 11.54 crore equity shares along with an offer for sale (OFS) of  17.51 crore equity share by existing stakeholders. It has set IPO price band at Rs 371- Rs 390.