Swiggy QIP Opens At Same Price As IPO Offer Last Year

Swiggy Ltd. launched its share sale to large institutions on Tuesday at nearly the same price as the initial public offering last year. The company aims to raise Rs 10,000 crore via qualified institutional placement.

The board has set the floor price at Rs 390.51 per equity share. The company may offer a discount of not more than 5% on the floor price.

Notably, Swiggy's IPO price was Rs 390 in November 2024. The share sale raised Rs 11,327 crore, of which a fresh issue of Rs 4,499 crore went to the company and the rest to selling shareholders.

The Swiggy board last month approved the fundraise through QIP, followed by shareholders' nod on Monday.

The company has shortlisted three banks to manage the share sale — the Indian units of Citigroup Inc. and JPMorgan Chase & Co., as well as Kotak Mahindra Capital Co., Bloomberg News reported.

The fund raise comes amid surging demand and intensifying competition in the sector. Startups are competing with Amazon.com Inc. and Walmart Inc.-backed Flipkart to cover cities with networks of neighborhood warehouses and fleets to quickly deliver everything from groceries and electronics.

JPMorgan in its report last month said that Swiggy has dialled down subsidies over the past three weeks but sharply increased marketing intensity, especially across paid display and paid search.

On the other hand, Macquarie remains constructive on the quick commerce sector growth but expects material, persistent losses, pushing back against the narrative of a sharp improvement in profitability driven by consolidation. It maintains 'underperform' ratings on Zomato-parent Eternal and Swiggy. The brokerage set a target price of Rs 200 on Eternal, implying a 33% downside, and Rs 285 on Swiggy, noting a potential 28.6% downside.

Swiggy shares ended nearly 3% higher at Rs 397.30 on the BSE, ahead of the announcement, compared to a 0.5% decline in the benchmark Sensex. The stock has fallen 8% since listing in November 2024.

Out of 28 analysts tracking the company, 23 maintain a 'buy' rating, three recommend a 'hold,' and two suggest 'sell,' according to Bloomberg data. The average 12-month consensus price target of Rs 497.93 implies an upside of 26.9%.