Swiggy Slashes IPO Valuation to $11.3 Billion Amid Market Turmoil

Indian food delivery giant Swiggy has reduced its initial public offering (IPO) valuation to $11.3 billion, reflecting a significant 25% drop from its original target of $15 billion. This decision comes as market volatility and the underwhelming debut of Hyundai India have dampened investor sentiment.

The $1.4 billion IPO is poised to become the second-largest stock offering in India this year, with significant backing from investors such as BlackRock and the Canada Pension Plan Investment Board (CPPIB). Despite the scaling back of its valuation, Swiggy is keen to ensure a successful market entry, particularly in light of recent trends that have seen Indian shares decline for four consecutive weeks, marking the longest losing streak since August 2023. The Nifty 50 index has seen a decline of over 8% from record highs reached on September 27.

Also Read: The Future of Swiggy: A Comprehensive Five-Year Outlook

The lukewarm response to Hyundai India’s shares, which fell 7.2% upon debut due to concerns over its valuation, has contributed to Swiggy’s cautious approach. To mitigate the risk of a lackluster reception, the company opted to revise its valuation after consultations with investors. According to insiders, Swiggy is eager to avoid a “bad IPO,” particularly following its last funding round in 2022, which valued the company at $10.7 billion.

Swiggy, which competes with Zomato in the online food delivery sector, is also heavily invested in “quick-commerce” services, focusing on delivering groceries and other products in as little as 10 minutes. This pivot comes as the company navigates the uncertainties in the market, exacerbated by global events such as the upcoming U.S. presidential election on November 5.

Despite recent challenges, the overall IPO market in India remains robust, with approximately 270 companies raising $12.57 billion so far this year, significantly surpassing the $7.4 billion raised in 2023. This resilience in the market underscores the ongoing demand for IPOs, even as individual companies like Swiggy recalibrate their expectations amidst fluctuating market conditions.