Institutional investors, however, stayed away. They typically increase their bidding activity on the final day of an issue. While qualified institutional bidders (QIBs) barely placed any bids on the first day, non-institutional investors such as corporates and individuals booked 6% of their allocation.
The IPO will close on Friday.
Swiggy plans to raise Rs 4,499 crore in primary capital, while shares worth Rs 6,828 crore are being put up on offer for sale by existing investors.
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The company has set a price band of Rs 371-390 for the issue.
On Tuesday, over 75 global and domestic investors were allocated shares worth Rs 5,085 crore in the issue’s anchor book at the upper end of the price band.
The company plans to utilise its fresh capital proceeds primarily towards expanding its quick commerce business Instamart, which competes with the likes of Zomato-owned Blinkit, Mumbai-based Zepto, Flipkart Minutes and Bigbasket’s BB Now.
At the upper end of the price range, Swiggy’s valuation is around Rs 95,000 crore. Its listed rival Zomato, which is also in process of raising Rs 8,500 crore through a qualified institutional placement, presently has a market capitalisation of Rs 2.25 lakh crore.
“Given that the company is still loss-making at an aggregate level, and overall profitability may be some time away, we recommend only high-risk investors to ‘subscribe for long term’,” brokerage firm Motilal Oswal said in a research note. “At the upper price band of Rs 390, the issue is priced at 7.8x FY24 market cap to sales and looks reasonably priced compared to Zomato, which is trading at 17.5x.”
In the first quarter of FY25, Swiggy reported operating revenue of Rs 3,222 crore, an increase of 34% year on year, while its net loss expanded to Rs 611 crore from Rs 564 crore in FY23.
Zomato has been profitable since the April-June 2023 quarter.
