Swiggy delivery bags are stored inside a truck in Mumbai, India, October 14, 2024. REUTERS
Nov 8 (Reuters) – Food and grocery delivery firm Swiggy’s (SWIG.NS), $1.4 billion initial public offering was fully subscribed on Friday, as institutional investors rushed in with orders on the final day of India’s second-largest share sale this year.
The portion reserved for institutional investors was subscribed 131%, while the shares earmarked for retail investors were 97% subscribed.
Swiggy holds a solid No. 2 position in India’s food and grocery market behind Zomato (ZOMT.NS). In food delivery, it has 34% of the market compared to Zomato’s 58%, while in quick commerce, Zomato’s Blinkit has an estimated 40-45% and Swiggy’s Instamart has 20-25%, according to brokerage estimates.
Analysts expect the loss-making company to make a muted debut on stock exchanges next week, weighed down by broader market weakness and concerns that profitability may be some time away.
“Institutional over-subscription on the third day … has happened as these investors generally subscribe keeping a long-term view – which looks strong for Swiggy given the duopolistic market in the booming food delivery and quick-commerce sector in India,” said Prashanth Tapse, senior vice president of research at Mehta Equities.
“But listing gains are not expected, especially considering the subdued sentiment in the secondary markets.”
While Zomato posted a fiscal 2024 profit after a loss the previous year, Swiggy is yet to turn profitable. It posted a net loss of 23.5 billion rupees in the year ended March 30, 2024, about 44% smaller than a year earlier.
U.S. stocks finished flat to higher Thursday after the Federal Reserve cut interest rates again, extending a sharp rally sparked by Donald Trump’s return as U.S.
Reporting by Hritam Mukherjee in Bengaluru; Editing by Clarence Fernandez and Kevin Liffey
