Swiggy IPO: The hype surrounding the launch in November. Here’s what investors need to know

Swiggy’s much-anticipated IPO is expected to begin in early November, with reports suggesting that public subscription is likely to open on November 6 and close by November 8.

The food delivery platform aims to raise around Rs 11,300 crore through the issue, which will include an offer for sale (OFS) worth Rs 6,800 crore and a fresh issue of shares worth Rs 4,500 crore.

Swiggy’s valuation for the IPO is estimated at $11.2 billion, down 25% from its initial target of $15 billion due to volatile market conditions and lukewarm reception to the IPO of Hyundai’s Indian unit. BT has not been able to independently verify these details.

The company intends to use the raised funds for technology, cloud infrastructure and expanding its presence through its subsidiary Scootsy, as well as branding and business promotion over the next four to five years.

In addition, BlackRock and the Canada Pension Plan Board (CPPIB) are reportedly among the main investors expected to participate, making Swiggy’s IPO one of the biggest public offerings of the year.

Swiggy’s main competitor, Zomato, launched its own IPO in 2021 and has since focused on achieving profitability.

Analysts expect a similar strategy for Swiggy as it works towards a positive EBITDA, likely due to reduced promotion and advertising spend.

“If we look back, Zomato quickly shifted its focus to improving profitability after the IPO, which has paid off handsomely. We expect Swiggy to do the same,” Atish Matlawala, senior fundamental analyst at SSJ Finance & Securities, was quoted as saying in an ET report.

Backed by big-name backers like Prosus, SoftBank and Accel, Swiggy will face not only Zomato but other e-commerce players including Zomato-owned Blinkit, Zepto and BigBasket as it prepares for the listing. .

The IPO process received SEBI approval on September 24 following Swiggy’s confidential filing earlier this year. Under SEBI’s confidential route, the company submitted two drafts for review, one in response to SEBI’s comments and the other open for public review for 21 days.

This regulatory pathway, introduced in 2022, allows companies to keep initial registration information confidential, minimizing exposure to competitors. Swiggy’s public debut follows the path of home-grown player Tata Play, which also pursued confidential filings before shelving its IPO plans.