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Swiggy's initial public offering (IPO) is facing a subdued market reception, with the grey market premium (GMP) indicating modest listing gains amidst a broader negative sentiment in the market. This comes at a time when the benchmark Sensex has plummeted, closing at a three-month low, and the Nifty has slipped below the 24,000 mark, reflecting a bearish market outlook.
Swiggy's IPO GMP currently sits at Rs 20-22, signifying a premium of 5.64 percent in the unofficial market. This represents a slight improvement from the Rs 18 GMP observed last week, but still indicates a tepid market response. The IPO's timing coincides with concerns surrounding urban demand slowdown and foreign investor outflows, adding to the pressure on the domestic market.
Despite these challenges, Swiggy's rapid expansion in quick commerce, which now accounts for 40 percent of its revenue, is expected to fuel its growth trajectory, mirroring the trends seen in its competitor, Zomato. Notably, major investors including Norway's sovereign wealth fund Norges and Fidelity have placed bids worth over $15 billion in Swiggy's IPO, highlighting a strong interest from institutional players.
However, Swiggy has adjusted its estimated valuation from the IPO to $11.3 billion, a reduction of 25 percent from an earlier projection of $15 billion. This downward revision reflects the current market conditions and the potential challenges facing the company. With the IPO set to open for bidding from November 6 to November 8, the final outcome will depend on investor appetite and market sentiment in the coming days.
Source: Swiggy IPO GMP indicates muted listing gains amid negative market sentiment