Tag Archives: Indian market

Swiggy Increases IPO Size to $1.4 Billion, Plans to Expand ‘Instamart’

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In a significant development in India’s burgeoning IPO market, SoftBank-backed food delivery giant, Swiggy, has received approval from its shareholders to increase the size of its fresh issue in its upcoming IPO. The approval will allow the company to raise the fresh issue size to 50 billion rupees ($595 million), a substantial increase from the previously planned 37.5 billion rupees. This information was disclosed by individuals privy to the matter on Thursday, 10th March 2024.

The Indian IPO market has been on a tear, with approximately 250 companies raising over $9 billion so far this year. This figure is more than double the amount raised during the same period last year, according to data from the London Stock Exchange Group (LSEG). The increase in Swiggy’s fresh issue size will further boost this trend, contributing to the market’s robust growth.

Swiggy’s existing shareholders will sell shares worth 66.64 billion rupees, a figure that remains unchanged despite the increase in the fresh issue size.

Swiggy’s IPO: A New Benchmark

The increase in the fresh issue size will push the total size of Swiggy’s initial public offering to $1.4 billion, up from the previously planned $1.25 billion. This makes Swiggy’s IPO one of the largest in the country this year, surpassing NTPC Green Energy’s $1.2 billion public offering filing.

Swiggy, headquartered in Bengaluru, had filed its draft papers for the IPO last week. The company is reportedly targeting a valuation of $15 billion, a testament to its rapid growth and dominant position in India’s food delivery market. However, Swiggy did not immediately respond to a request for comment on these developments.

The company’s investment plans following the IPO are ambitious and forward-looking. A key focus area is the expansion of its quick-commerce business, ‘Instamart’.

Instamart: The Future of Quick Commerce

This service aims to deliver everything from groceries to higher-margin electronics in just 10 minutes, a feat that would revolutionize the e-commerce landscape. Swiggy’s rivals, including Zomato and Zepto, are also racing to establish their presence in this promising segment.

The shareholder approval for the upsized IPO marks a significant milestone for Swiggy. The main shareholder in the company, SoftBank, has been instrumental in supporting Swiggy’s growth and will likely play a crucial role in the IPO process. The upsized IPO, approved on Thursday, 10th March 2024, will provide Swiggy with additional resources to execute its ambitious growth plans.

Historically, the upsizing of IPOs has been a strategy employed by companies expecting strong investor demand. For instance, in 2020, Snowflake Inc., a cloud-based data warehousing startup, upsized its IPO due to overwhelming investor interest, raising $3.4 billion and marking the largest software IPO in history.

Similarly, Swiggy’s decision to upsize its IPO could be indicative of strong investor confidence in the company’s growth prospects and the overall potential of India’s digital economy.

India’s IPO Boom: 15 Companies File Draft Papers in Single Day As Hungry Retail Investors Queue Up

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In a sign of India’s booming equity markets, 15 companies submitted their initial public offering (IPO) draft documents to the Securities and Exchange Board of India (SEBI) on the last day of September. This brings the total number of IPO filings for the month to 41, marking the highest-ever filings in a single month.

Market analysts attribute the surge in filings to the expiration of audited financial statements for the quarter ending March 31, which remain valid only until September 30.

“We anticipate over ₹1.5 lakh crore ($18 billion) to be raised through IPOs this year, with many growth-stage businesses entering the market. Additionally, we expect multinational corporations to increasingly tap into India’s capital market,” said Mahavir Lunawat, Managing Director of Pantomath Capital Advisors.

Lunawat also noted that mutual fund inflows have nearly doubled since the previous quarter, reaching approximately ₹40,000 crore ($4.8 billion) each month. This surge in liquidity has significantly boosted market confidence.

Indian equity markets have reached record highs, reflecting strong investor sentiment, which has been bolstered by expectations of changes in domestic interest rates following the U.S. Federal Reserve’s recent 50-basis-point rate cut. Experts remain optimistic about the overall outlook for India’s stock markets.

India’s inclusion in JP Morgan’s global bond indices has also drawn approximately $18 billion in foreign investment over the past year, with analysts predicting further inflows following recent U.S. interest rate reductions. This trend is expected to lower bond yields and reduce borrowing costs, making Indian debt more attractive to foreign investors. Future monthly inflows could range between $2 billion and $3 billion, further enhancing foreign participation in India’s bond market.

According to Angel One Wealth, more than 5,450 companies have gone public globally in the first half of this year, with India accounting for around 25% of those listings. Last year also saw a high number of IPOs in India, driven by strong domestic investor interest in emerging sectors.