Swiggy’s Public Offering: A Thoughtful Look at India’s New-Age IPOs

As Swiggy's ₹11,327 crore IPO creates waves, comparisons with Paytm's notorious post-listing decline are rampant. Both are India's new-age tech IPO frenzy, but Swiggy seems to be taking cues from Paytm's failures.

 

Key Highlights:

 

IPO Size & Valuation: Swiggy's IPO is India's biggest after Paytm's ₹18,300 crore listing in 2021. Swiggy, though, has gone with a lesser $11.3 billion valuation compared to its earlier $15 billion target. By doing so, Swiggy does not want to fall into the overvaluation trap that caused Paytm's sharp post-IPO correction.

 

Financials & Growth: Swiggy continues to be loss-incurring (₹3,116.7 crore in FY25), but revenue jumped 35% to ₹15,226 crore. In contrast to Paytm, which faced regulatory issues and a crashing share price, Swiggy delayed its IPO to organize its operations better and move closer towards profitability. Its food delivery and Out of Home are already profitable, and quick commerce losses will soon hit a peak.

 

Market Reaction: Swiggy's IPO was 3.6 times oversubscribed, driven by robust institutional demand, but retailing interest was subdued. Shares recorded initial gains but were under pressure as pre-IPO lock-ins lapsed.

 

Strategic Initiatives: Swiggy's "super app" concept mirrors Paytm, but Swiggy is targeting product innovation and high-value consumers, avoiding Paytm's aggressive push into low-margin segments.

 

Prospects:

Swiggy's gradual strategy, operating emphasis, and absence of regulatory overhang indicate that it could sidestep Paytm's missteps. The next quarters will tell us if Swiggy is able to create sustainable worth or experiences an IPO rollercoaster similar to Paytm.

 

Source: Indian Express, Economic Times, Business Standard