The grey market premium (GMP) of Swiggy stands at 5% or Rs 20 in the unlisted market, a day ahead of its initial public offering (IPO), which opens tomorrow, i,e., on November 6.The issue will remain available for subscription till November 8.The company has fixed a price band of Rs 371-390 per share for the IPO, which means that the investors are willing to pay about Rs 410 for one share of the company.However, it is important to note that grey market premiums are just an indicator as to how the company's shares are stacked up in the unlisted market and are subject to change rapidly.About a month ago, Swiggy shares were trading at Rs 515 in the unlisted market.Swiggy is serving the IPO at a lower valuation of $11.3 billion as against its earlier target of around $15 billion. The valuations were reduced due to prevailing market volatility and the lacklustre debut of Hyundai India.Swiggy’s last private round valuation was $10.7 billion when it raised $700 million in a round led by US asset manager Invesco in January 2022.The company has increased its fresh equity sale in the IPO to Rs 4,499 crore, while reducing its offer for sale (OFS) component to 17.5 crore shares.A host of celebrities from entertainment and sports have bet on India's food and grocery delivery market, hoping that Swiggy would capture the lion's share of the market.Leading up to the IPO, Swiggy's shares were actively traded in the unlisted market, with notable cricketers Rahul Dravid and Zaheer Khan, tennis star Rohan Bopanna, studio owner Karan Johar, and actor and entrepreneur Ashish Chowdhry owning a piece of the company.After its IPO, analysts believe Swiggy will aspire to turn EBITDA positive in the near term by curtailing its promotional and advertising spends and according to a report, the online food delivery market is expected to grow at 20% during CY23-28, largely led by user CAGR of 8-10%.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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