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Swiggy, the popular Indian food delivery platform, has faced a tepid response to its initial public offering (IPO) on the first day of issuance. Despite being a widely recognized name in the Indian market, the IPO garnered only 12% subscription, highlighting a cautious investor sentiment. The IPO consists of a new offering worth ₹4,499 crore and an offer-for-sale (OFS) of 175,087,863 equity shares from the company's selling shareholders.
The OFS sees several prominent investors offloading their stakes, including Accel India IV (Mauritius) Ltd, Apoletto Asia Ltd, Alpha Wave Ventures, LP, Coatue PE Asia XI LLC, DST EuroAsia V B.V, Elevation Capital V Ltd, Inspired Elite Investments Ltd, MIH India Food Holdings B.V, Norwest Venture Partners VIIA-Mauritius, and Tencent Cloud Europe B.V. This suggests a potential shift in investor confidence towards Swiggy's future prospects.
Despite the lukewarm response, retail investors displayed the highest level of interest in the IPO, demonstrating their continued belief in the company's potential. Swiggy plans to utilize the net proceeds from the IPO for strategic investments in its subsidiary Scootsy, fulfilling debt obligations, expanding its network of dark stores in the quick commerce industry, and covering lease or licensing fees associated with these stores. The company's focus on building a robust network of dark stores for quick delivery is a testament to its commitment to the rapidly growing quick commerce sector.
The tepid response to Swiggy's IPO reflects the current market conditions characterized by economic uncertainties and inflation concerns. Investors seem to be exercising caution before investing in new ventures, particularly in the technology sector. However, the strong interest from retail investors indicates a continued belief in Swiggy's long-term growth potential. It remains to be seen how Swiggy will navigate these challenging market conditions and whether it can successfully capitalize on the opportunities presented by the growing Indian food delivery and quick commerce market.