Swiggy, India's food delivery services, plans to open its initial public offering (IPO) in early November, with a subscription window opening on November 6, according to The Economic Times report.
Swiggy has also cut its IPO valuation by 25% from its initial $15 billion target, citing recent market volatility and Hyundai India's dismal debut as factors influencing investor sentiment.
Atish Matlawala, Senior Fundamental Analyst at SSJ Finance & Securities, told ET, "If we look back, Zomato quickly shifted its focus on improving profitability post-IPO, which has paid off well. We expect Swiggy to do the same,"
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If successful, this IPO would be the second-largest in India this year, demonstrating Swiggy's growth ambitions in a competitive sector.
The report added that Swiggy's IPO is also expected to attract global investors, such as BlackRock and the Canada Pension Plan Investment Board (CPPIB). The proceeds from the IPO will be used to fund many strategic investments. The company plans to strengthen its technology and cloud infrastructure. Furthermore, resources will be allocated to brand marketing and overall business development during a four to five-year period.
Swiggy, which competes directly with Zomato, has made significant investments in extending its footprint in "quick commerce," which provides swift delivery of groceries and other necessities within minutes. Following the IPO, experts anticipate Swiggy would pursue EBITDA profitability in the short term by decreasing its promotional and advertising spending, with the goal of establishing a more sustainable development trajectory in the face of tightening market dynamics.
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