Swiggy IPO: How investors justify risky pre-listing trading
Subscribe to enjoy similar stories. MUMBAI : At a recent informal investor meet-up in Bengaluru, half of the 20-odd participants said they had received calls to buy Swiggy shares ahead of its initial public offering (IPO). The Mint writer's tweet on the subject, asking for comments, elicited hundreds of responses.
India seems to have moved from the Coldplay ticket row to the pre-IPO investment gamble—Swiggy's shares are being sold and re-sold for higher prices in the grey market. Investors have spent the last three years twiddling their thumbs, waiting for the younger half of India's food-delivery duopoly to finally go public. And with Zomato’s stock, listed in 2021, spiking 174% over the past year, they seem ready to toss caution to the wind.
Many are betting that the valuation gap between Swiggy’s market capitalization —at current grey-market prices—of around 85,000-90,000 crore will be closer to Zomato's ₹2.5 trillion m-cap. "I bought Swiggy's pre-IPO shares because, I think, it would catch up with Zomato. Zomato's m-cap is ₹2.5 trillion, and Swiggy's m-cap after the IPO is expected to be ₹1 trillion.
I bought Zomato's shares in 2022 through my parents' accounts after a correction in the stock's price. The investment has risen 2-3X since then. So, in the worst-case scenario, if Swiggy corrects, I would just average down.
It's just a ₹50,000 investment at around ₹480 per share," said Harsh Patwari, a CA final-year student from Kolkata. Some bigger investors take a more nuanced view. “I don't think their m-cap will converge with Zomato.
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