Swiggy IPO subscription: Swiggy IPO oversubscribed as institutional investors do final-day heavy lifting

Food and grocery delivery firm Swiggy’s Rs 11,300-crore initial public offering (IPO) was subscribed 3.6 times the shares on offer as institutional investors amped up their bidding activity on the final day.The bookbuilding for the offering, which commenced on November 6, saw qualified institutional buyers (QIBs) swoop in on the last day and bid for six times the shares allocated to them.

Retail investors subscribed to their portion 1.14 times, while the portion reserved for employees saw 1.65x bidding.

Non-institutional investors, which include corporates and high net worth individuals (HNIs), bid for only 41% of the shares reserved for them.

This was the country’s second-largest IPO this year after Hyundai Motor India and saw significant interest from institutional investors.

In the company’s anchor book, which closed on November 5, Swiggy allocated shares worth Rs 5,085 crore to over 75 global and domestic investors. ET had reported earlier that the anchor book was oversubscribed by 25 times.

The anchor portion saw shares being allotted to foreign investors such as BlackRock, Fidelity, Nomura, BNP Paribas and Allianz Global – in addition to Indian investors such as SBI Mutual Fund, ICICI Prudential Mutual Fund, Kotak Mutual Fund, Axis Mutual Fund and HDFC Life.

The Bengaluru-based firm’s shares will list on the stock exchanges on November 13.

Swiggy had set a price band of Rs 371-390 per share for its offering, which includes Rs 4,499 crore in primary fundraise and an offer-for-sale (OFS) of stock worth Rs 6,828 crore by investors including Prosus, Accel, Elevation Partners, Norwest, Tencent, and Meituan.

As it came closer to launching its IPO, Swiggy increased the size of its fresh capital raise while reducing the OFS component compared to its initial plans.

Several existing investors including Meituan, DST Global, Norwest, Elevation Capital and Coatue had offloaded Swiggy’s shares through secondary transactions.

At the upper end of the price band, the company is valued at Rs 95,000 crore. Gurugram-based Zomato, its larger rival, had a market capitalisation of Rs 2.2 lakh crore as of Thursday’s market close.

Zomato went public in July 2021, when the firm’s Rs 9,375-crore IPO was subscribed 38 times.

The two companies have been duking it out in the food delivery segment for years and the focus has now shifted to quick commerce, where Zomato-owned Blinkit competes with Swiggy’s Instamart, in addition to companies such as Zepto, Flipkart Minutes and Bigbasket’s BB Now.

Swiggy’s primary capital raise will arm it against these rivals who have been rapidly raising funds. While Zepto scooped up $1 billion over the last four to five months, Zomato is also set to raise $1 billion through a qualified institutional placement.