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Swiggy Reduces IPO Valuation Amid Market Challenges
NEW DELHI (Reuters) – India’s prominent food delivery service, Swiggy, has adjusted its initial public offering (IPO) valuation to $11.3 billion, marking a 25% decline from its initial target of $15 billion. This adjustment comes as market volatility and a tepid debut of Hyundai India have negatively impacted investor sentiment, according to two informed sources.
The upcoming $1.4 billion IPO is set to be the second-largest stock offering in India this year, with investment from major players including BlackRock and the Canada Pension Plan Investment Board (CPPIB).
Responses from Swiggy, BlackRock, and CPPIB were not immediately available due to the timing of the inquiry, which fell outside of regular business hours.
Indian equities have faced a downward trend, declining for four consecutive weeks—the longest series of losses since August 2023. The Nifty 50 benchmark index has experienced a drop of over 8% from its all-time highs reached on September 27, largely driven by ongoing foreign selling.
Hyundai India’s shares suffered a 7.2% decrease on their market debut last week, reflecting a lukewarm reception from retail investors who expressed concerns regarding the company’s high valuation.
Swiggy, which is backed by SoftBank and Prosus, appears cautious about the potential for a lackluster response to its sizeable IPO given the backdrop of global uncertainties, including the upcoming U.S. presidential election on November 5. In light of investor advice, the company opted to reduce its valuation, as indicated by a source familiar with the situation.
The source underscored the company’s desire to avoid a “bad IPO,” referencing the company’s previous funding round led by Invesco, which had valued Swiggy at $10.7 billion in 2022.
In the competitive landscape of India’s online food delivery market, Swiggy is engaged in direct competition with Zomato, as both firms aggressively invest in the burgeoning “quick-commerce” sector, which promises delivery of groceries and other products within a brisk ten-minute timeframe.
Despite these recent fluctuations, India’s IPO scene has remained vibrant, with approximately 270 companies raising $12.57 billion this year, surpassing the $7.4 billion recorded for the entire year of 2023.
Source
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