Swiggy cuts IPO valuation to £8.7 bn amid market concerns

INDIAN food delivery platform Swiggy has revised its IPO valuation down to £8.7 billion, marking a 25 per cent decrease from its initial £11.5 billion target.

This adjustment reflects ongoing market volatility and the underwhelming IPO debut of Hyundai India, according to two sources on Sunday.

BlackRock and the Canada Pension Plan Investment Board (CPPIB) are set to invest in Swiggy’s £1.1 billion IPO, anticipated to be India’s second-largest stock offering of the year, the sources told Reuters.

Indian stocks have seen declines over the last four weeks, the longest such trend since August 2023. The Nifty 50 index has dropped over 8 per cent from its peak on 27 September, affected by consistent foreign selling.

Hyundai India’s shares dropped 7.2 per cent in their first week as retail investors showed limited interest, citing concerns over high valuations.

Swiggy, backed by SoftBank and Prosus, wanted to avoid a lukewarm response to its substantial IPO amid global uncertainties, including the upcoming US presidential election. The company decided to lower its valuation after consulting with investors, a source with knowledge of the plan said.

Swiggy aims to avoid a “bad IPO,” the source stated. The company was valued at £8.2 billion in 2022 after a funding round led by Invesco.

Swiggy competes with Zomato in India’s online food delivery market, with both companies also focusing on “quick-commerce,” a model aimed at rapid delivery of groceries and other items within 10 minutes.

Despite current market jitters, India’s IPO sector remains active, with approximately 270 companies raising £9.7 billion this year, surpassing the £5.7 billion raised in 2023.

(With inputs from Reuters)