Swiggy Lowers its IPO Valuation Estimate to $12.5–13.5 Billion Owing to Market Volatility

Nitin Konde, Varun Bhardwaj

Oct 25, 2024 — 3 min read

Swiggy Lowers IPO Valuation

According to multiple media sources, the Indian food delivery giant Swiggy is lowering its target by 10–16% because of market volatility, with the business aiming internally for a corporate valuation of $12.5 billion–13.5 billion for its impending IPO.

Prior to this week's launch by Hyundai India, Swiggy was aiming for a $15 billion valuation for its $1.4 billion November IPO, which will rank as the nation's second-largest stock offering of the year. Due to recent market volatility and a decline in Indian stock markets, reports further highlighted Swiggy's consideration of a lower valuation to ensure that bidders leave "a lot of value on the table."

Hyundai India’s Flop Debut Triggered Restructuring of IPO Launch

Due to sustained foreign selling, India's benchmark Nifty 50 index has fallen 7.15% from record high levels reached on September 27 and is on track to post four consecutive weeks of losses.

Hyundai India's shares experienced a 7.2% decline on their market debut on 22 October due to a lacklustre response from retail investors, who were concerned about the company's high valuation and the potential for an auto industry downturn. According to additional reports, Swiggy is anticipated to list on the Mumbai stock exchange on November 13 and begin accepting subscriptions for its first public offering the week prior, but the exact date may vary.

India’s IPO Market

India's initial public offering (IPO) industry has been booming despite recent tremors; over 270 firms have raised $12.57 billion so far this year, surpassing the $7.4 billion raised in 2023. Swiggy intends to begin holding roadshows for its stock offering in numerous Indian cities on October 30.

In India's online restaurant and cafe food delivery market, Swiggy and Zomato are competitors. Both companies have placed significant bets on the so-called rapid commerce boom, which promises to deliver groceries and other goods in ten minutes. Swiggy was valued at $10.7 billion in its most recent fundraising round, which was led by Invesco in 2022.

Enticing Factors of Swiggy’s IPO

Swiggy's IPO might present investors with a potential bargain given the unpredictability and recent declines of Indian markets. Given the escalating competition with Zomato and the rapidly evolving quick commerce landscape, the company's strategic pricing aims to capitalize on the current market conditions and present a lucrative opportunity amidst a cautious market attitude.

One of the year's most anticipated public offerings is Swiggy's eagerly expected IPO. Investors hold high expectations for Swiggy, especially considering its potential for profitability following the successful stock market launch of its rival Zomato.

Swiggy intends to invest INR 982.4 crore to support lease and licence payments as well as the expansion of its network of dark stores for the rapid commerce segment, according to its Updated Draft Red Herring Prospectus (UDRHP). With a fresh issue valued at INR 3,750 crore and an offer for sale (OFS) exceeding INR 6,500 crore, the IPO is anticipated to generate approximately INR 10,000 crore.