Swiggy, the food and grocery delivery platform, has reportedly got approval from the market watchdog, Securities and Exchange Board of India, for its initial public offering (IPO), valued at $1.25bn.
The Prosus and SoftBank-backed company recently increased the size of its IPO as competition heats up in the online grocery delivery market, where its platform Instamart goes head-to-head with rivals like Zomato-owned Blinkit and Zepto, according to a report by moneycontrol.
"Under the confidential filing route, this nod will be followed by the filing of two updated DRHPs (draft red herring prospectus), one responding to Sebi comments and the other seeking public comments for 21 days. Only then will the RHP (red herring prospectus) be filed, and the IPO launch planned," as per sources cited in the report.
Besides Prosus and SoftBank, which own 32 per cent and 8 per cent stakes in the company, respectively, Accel, Elevation Capital, DST Global, Norwest and Tencent are some of the other major shareholders.
While there is no final date for the IPO that has been approved as such, reports indicate that the issue might hit the primary market in the coming November.
For SoftBank, this is going to be the fourth major new-age company set to hit the D-street this year. Unicommerce and Brainbees (FirstCry) witnessed their IPOs earlier in August. Meanwhile, the most anticipated public offering, Ola Electric, saw a bumper premium during its first listing. While the shares of the EV manufacturer continues to stay well above its issue price, the shares have experienced a major decline in the recent month.
Too Much Liquidity
This year, the Indian primary market has witnessed major investor attention, both in the mainboard segment and SME. While the euphoria continues to stay, analysts are worried about the massive premium listings of loss-making companies or firms with insignificant bottom lines.
While there’s growing optimism around the IPO market with much liquidity pouring in, analysts warn that too much inflows could be a double-edged sword and should be handled with caution.
