The Swiggy delivery team came together after attempting to break the Guinness World Record for the largest Vada Pav (Indian Burger) delivery in Mumbai. The Swiggy team set a Guinness World Record by delivering eleven thousand (11,000) Vada Pav (Indian Burger) across the city.
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Indian food delivery giant Swiggy’s IPO performed well, the country’s second-largest IPO this year, with its shares soaring more than 9% in its first trade on Wednesday.
The company, which is backed by SoftBank, raised 113.27 billion Indian rupees ($1.34 billion) in an IPO that ended on Monday. Its shares are priced at Rs 390 piece. The IPO was reportedly oversubscribed by more than three times Indian Business Outlets Mint.
The listing follows Hyundai Motor India’s $3.3 billion initial public offering (IPO) in October, the largest listing in the country.
Swiggy shares allocated to qualified institutional buyers were subscribed more than six times, According to the Mintand the partial subscription rate for retail investors was 114%.
The IPO includes the sale of existing shares worth Rs 6,828 crore and the issuance of new shares worth Rs 4,499 crore.
Lead bookrunners on the IPO include Kotak Mahindra Capital, JPMorgan Chase India and Citigroup Global Markets India.
Swiggy said the net proceeds of Rs 4,359 crore from the new issue of shares will be used to repay borrowings of its subsidiary Scootsy and make further investments in the unit.
Proceeds can also be used to fund inorganic growth through acquisitions and other means.
Swiggy shares were last up 13.1% at Rs 441.65.
Profitability concerns
Macquarie Equity Research said in a note shortly before the shares began trading that the company had a “strong underlying growth runway and improving margins” but a “long and winding road to profitability”.
They pointed out that India’s “fast business” industry has gained rapid popularity in the past 1-2 years.
The research firm added that there is an “exponential potential growth runway” for Swiggy’s delivery arm Instamart as the industry accounts for only about 1% of India’s overall grocery retail landscape.
However, Macquarie expressed concerns about Instamart’s profitability and said there were headwinds to improving the unit economics of the business.
Challenges include lower average order values if Instamart expands beyond India’s eight major cities, as well as inflationary pressures from regulatory actions, such as India’s welfare scheme for gig workers. It is reported Working on it.
Macquarie remains optimistic about Swiggy catching up with market leader Zomato in food delivery. Although Swiggy is not as profitable as Zomato due to smaller base, higher branding and employee costs, it has the potential to bridge the gap, it added.
Karan Turani, senior vice president of capital markets firm Elara Capital, said in an interview with CNBC’s “Street Signs Asia” that Swiggy faces relatively little competition in the food delivery business as only Zomato is the main competitor.
However, Turani said the company will face “very, very fierce” competition in the fast commerce space, where there are four large players and e-commerce giants such as Amazon are also making inroads.
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