Swiggy, the Indian food delivery company backed by SoftBank, had a successful IPO debut, with its shares surging 15%.
The IPO raised 113.27 billion Indian rupees ($1.34 billion) and was oversubscribed more than three times. The IPO included an offer for the sale of existing shares worth 68.28 billion rupees and a fresh issue of shares valued at 44.99 billion rupees.
The lead bookrunners for the IPO were Kotak Mahindra Capital, J.P. Morgan India, and Citigroup Global Markets India.
The net proceeds from the fresh issue, amounting to 43.59 billion rupees, will be used to reduce borrowings in Swiggy's subsidiary, Scootsy, and for further investments in the same entity. The funds may also be used for potential acquisitions.
Swiggy's delivery team recently attempted to set a Guinness World Record by delivering 11,000 Vada Pavs across Mumbai, showcasing the company's operational capabilities.
Analysts from Macquarie Equity Research are optimistic about Swiggy's growth potential, but raised concerns about the profitability of its delivery arm, Instamart.
Swiggy faces competition from Zomato in the food delivery sector and from four major players in the quick commerce segment.
Despite the challenges, investor sentiment remains positive, reflecting the potential of tech-driven companies in India. The successful IPO and rise in share prices indicate confidence in Swiggy's business model.
Swiggy is well-positioned to capture a larger share of the food delivery and quick commerce markets in India.