Recently, just a day prior to Swiggy’s IPO opening for investors, the food delivery giant raised a staggering sum of Rs 5,085 crore via an anchor investors round. This considerable anchor investment is bound to reaffirm the belief of the leading institutional investors in Swiggy’s potential for growth even during this current uncertain period of the markets.
The distribution of shares to anchor investors was completed at Rs 390 per share which is the upper limit of Swiggy IPO price range of Rs 371-390 per share. In all, Swiggy has issued 130.4 million shares to 151 anchor investors including the marquee global funds and the local institutions. Prominent players in the anchor book included global funds such as Fidelity, BlackRock, Capital, Amundi, and Schroders, as well as Indian institutional investors ICICI Prudential Mutual Fund, SBI Life, HDFC Life, and Axis Mutual Fund. The securing of this major investment allows Swiggy to enhance levels of trust from potential investors with regards to the firm’s undertaking of the forthcoming IPO which is targeted to collect an audacious sum of Rs 11,327 crore.
This IPO is a combination of fresh issue and offer-for-sale, of which Rs 4,499 crore is a new issue and Rs 6,828 crore comes from offer-for-sale of existing shareholders. Notable investors who will be offloading their equity as part of this round include Tencent, Accel India and Apoletto Asia. These new funds are aimed at supporting Swiggy’s growth plans, especially in the expansion of dark stores spread to support its quick-commerce grocery business Instamart. There are also more plans of the firm such as investing to enhance technology processes and building their brand to decrease the competition which mainly comes from Zomato.
Swiggy’s proposed IPO amounting to Rs 87,300 crore at the upper price band is India’s sixth biggest IPO to date and also records the second highest IPO to date this year. The IPO pots are apportioned such that 75% goes to institutional investors, not because of profitability for Swiggy; this has only a 10% allocation for retail investors which is below the average retail allocation in India’s IPOs.
Swiggy is a food ordering and delivery company that was founded in 2014 in Bangalore by Sriharsha Majety and Lakshmi Nandan Reddy Obul. Since then, the company’s activities have evolved from delivering only food orders to also offering groceries and other household necessities. On the other hand, Zomato, a rival of Swiggy that went public in 2021, is still the only Indian food delivery service that has an IPO, and since then, the Initial Public Offering of Swiggy has been touted as the next big IPO in the food delivery services space.
The much-anticipated IPO listing of Swiggy is set to take place on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on November 13. According to reports the shares of the food delivery app Swiggy have been available for a meager premium indicating optimistic sentiments about most active markets even when trading conditions are tough.
