Swiggy, one of India’s leading food delivery platforms, is set to launch its Initial Public Offering (IPO), raising ₹11,327.42 Crores. The IPO consists of a Fresh Issue of 1,153.58 Lakh Shares worth ₹4,499 Crores, alongside an Offer for Sale of 1,750.87 Lakh Shares totaling ₹6,828.42 Crores. The price band for the Swiggy IPO is set at ₹371 to ₹390 per equity share, with a lot size of 38 shares. The retail investor is required to invest a minimum of ₹14,820, while High-Net-Worth Individuals (HNIs) must invest ₹2,07,480 for a minimum of 14 lots.

Swiggy IPO Key Dates

• Subscription Period: November 06-08, 2024
• Allotment Date: November 11, 2024
• Listing Date: November 13, 2024 (tentative)

Swiggy IPO Financial Overview

Swiggy’s financials for the last three fiscal years show significant losses:

• Revenue from Operations:
  • FY2024: ₹61,197.77 Million
  • FY2023: ₹87,144.53 Million
  • FY2022: ₹116,343.49 Million
• EBITDA:
  • FY2024: ₹-32,337.62 Million
  • FY2023: ₹-39,103.37 Million
  • FY2022: ₹-18,355.67 Million
• Profit After Tax (PAT):
  • FY2024: ₹-22,559.50 Million
  • FY2023: ₹-41,921.73 Million
  • FY2022: ₹-36,312.28 Million

For the IPO, Swiggy is offering shares at a pre-issue EPS of ₹-10.70 and a post-issue EPS of ₹10.07. Despite the negative Earnings Per Share (EPS) and Price-to-Earnings (P/E) ratio of -36.44x (pre-issue) and -38.72x (post-issue), the company's Market Capitalization at the upper price band of ₹390 per share is expected to be ₹87,298.60 Crores.

Investment Purpose and Use of Proceeds

Swiggy plans to utilize the funds raised through the Fresh Issue for several key objectives:

1. ₹1,648 Million for investment in Scootsy (a material subsidiary), particularly for repayment of borrowings.
2. ₹11,787 Million for expansion of Dark Stores and lease/license payments.
3. ₹7,034 Million for enhancing technology and cloud infrastructure.
4. ₹11,153 Million for brand marketing and promotion to increase platform visibility.
5. Funding for acquisitions and general corporate purposes.

Swiggy IPO Grey Market Premium (GMP) and Subscription Status

As of November 08, 2024, the Grey Market Premium (GMP) for Swiggy IPO is ₹0, indicating no expected gains in the market post-listing. The IPO subscription has been recorded at 3.59 times on the final day, with a significant portion allocated to Anchor Investors. Swiggy raised ₹5,085.02 Crores from Anchor Investors, with shares priced at ₹390 each.

IPO Review: Should You Invest?

Swiggy is a consumer-first technology company, offering a broad range of services through its unified app, including food delivery, grocery delivery, and other household items via Instamart. However, the company’s financial performance reflects substantial losses and a negative EPS, which may raise concerns for potential investors looking for listing gains or long-term investments.

The IPO’s valuation appears to be quite steep, especially when compared to the industry P/E ratio of 634.50x. Swiggy’s negative financials and zero GMP suggest that the IPO is fully priced, making it less attractive for investors seeking quick returns or long-term growth.

Final Verdict: Avoid Swiggy IPO

Considering the financial performance, valuation concerns, and lack of listing gains indicated by the GMP, we recommend investors to avoid the Swiggy IPO for both listing gains and long-term investment purposes. Investors should exercise caution and consult a financial advisor before making any investment decisions.

Disclaimer: The information provided here is for educational and informational purposes only. It should not be construed as financial advice. Investors are advised to consult with professionals before making any decisions.