Swiggy IPO gets fully subscribed. Check GMP and other key details

Even as Swiggy Ltd's IPO sailed through on the final day of the bidding process, the GMP has fallen to near zero from around Rs 2-3 in the grey market.

The tepid demand was reflected in the subscription response for the IPO, with only the institutional investors' and retail portions fully subscribed so far. The NII category has not yet sailed through.

Analysts said Swiggy's IPO is for investors who are optimistic about the company's long-term transformation potential but also recognize the current limitations in growth and profitability.


"For Swiggy, profitability may remain elusive for the next few years, particularly on a consolidated basis. The company's quick commerce business has yet to show strong performance, and achieving profitability across all segments may take time," Abhishek Jain, Head of Research, Arihant Capital said.

Profitability concerns are significant, as investors have become increasingly wary of tech companies that require extended timelines to post positive bottom-line numbers.

The company has more than doubled its revenues to just over Rs 11,000 crore in the last two fiscals, but the bottom line remains in the red with a loss of Rs 2,350 crore in FY24.

Swiggy has priced the IPO conservatively at a valuation of $11.3 billion. However, some analysts still consider this to be aggressive.

For instance, Samco Securities advised investors to avoid subscribing to the IPO due to valuation concerns, recommending that they wait until the company’s financial performance and growth outlook improve.

The food delivery company plans to use the IPO proceeds for investment in its material subsidiary, Scootsy, as well as for technology and cloud infrastructure, brand marketing, and business promotion. This will be done over a four- to five-year period.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)