Swiggy IPO allotment status released: What GMP indicates ahead of listing date

Shares of food delivery giant Swiggy will be listed on the exchanges on Wednesday, November 13, after its high-profile IPO launch last week. However, despite being the second-largest e-commerce and food delivery player, it received a fairly sluggish response, according to an Economic Times report. The report added that it was subscribed to just over three times, mostlyby institutional investors on the last day, just like the Hyundai IPO.

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According to the report, its grey market premium (GMP) is just ₹1, which is 0.26% over the issue price.

“We believe the majority of the investors, especially non-institutional and retail, stayed back for a few reasons like Negative cash flow business model followed by concern on high competition and ongoing negative market mood,” the report quoted Prashanth Tapse of Mehta Equities as saying.

Swiggy has only incurred net losses every year since incorporation and has only had negative cash flows from operations, unlike its already-listed competitor, Zomato.

Swiggy and Zomato not just compete with each other in food delivery but also in the quick commerce segment with Instamart and Blinkit, respectively, delivering a whole host of items in 10 minutes.

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Swiggy’s net loss for the financial year 2023-24 was ₹2,350 crore, which is lesser than the loss of ₹4,179 crorethe year before. It was ₹3,628 crore in 2021-22.

However, revenue from operations in 2023-24, did double to ₹11,247 crore from ₹5,704 crore in FY22, according to the report.

“Considering low subscription demand and market sentiments, there is a very high possibility of flat to negative listing in the range of plus or minus 5-10% on its issue price,” he added.

Swiggy has proposed using the IPO’s proceeds to invest in a subsidiary, Scootsy, and for technology, cloud infrastructure, brand marketing, and business promotion over a four-—to five-year period.

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