Swiggy, which looks to list on domestic bourses on Wednesday, saw its public offer being subscribed 3.59 times by the end of its book building process on Friday.
While the portion allotted for Qualified Institutional Buyers witnessed strong demand, non-institutional investors made bids for only 41% of their allocated portion and retail investors were subscribed 1.14 times.
“Non-institutional investors, high-net worth individuals, invest for listing gains. When they see a clear picture that listing gains are not going to be there, so normally they take a back seat,” noted Prabhakar A.K, former head of research at IDBI Capital.
“When the company cut its valuation from $15 billion to $11.3 billion, I mean they tried to put something on the table for the investors but that also was a sign for the investors of lack of confidence,” said Ninad Sarpotdar, Equity Research analyst at Aditya Birla Money.
Moreover, the market has been lackluster in the past month or so, which has been driving participation rates down across the board, according to Karan Kamdar, Senior Analyst at Research and wealth advisory firm Deven Chokesy.
Analysts are looking at a grey market premium of Rs 1 to Rs 3 on the higher side for Swiggy’s listing today, according to a banking source.
The listing is expected to be at par with Swiggy’s IPO price or at a slight discount, according to another banking source.
The quick commerce and food delivery giant has set its price band at Rs 371 to Rs 390 apiece. It is looking to raise Rs 11,700 crore at a valuation of around Rs 87,000 crore, or about $11.3 billion at the upper price band.
