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Motilal Oswal Report
Swiggy Ltd. launched its initial public offering on Wednesday and the offer closes for subscription on Nov. 08. One of India’s leading food delivery and hyperlocal logistics company has fixed the price band in the range of Rs 371-390 per share. The minimum order lot for bidding in 38 shares.
The Rs 11,327.40 crore IPO comprises of fresh issue of Rs 4,499 crore alongside an offer for sale of 17.51 crore shares of about Rs 6,828.43 crore
Our View
Swiggy operates in a oligopoly market which is at a nascent stage, thus providing enough opportunities for players to create their niche. Swiggy’s innovation DNA is key to success and it could again be at the forefront through its new 10-minute food delivery offering.
However, given that the company is still loss making at an aggregate level, and overall profitability may be some time away, we recommend only High Risk investors to ‘Subscribe for long term’.
At the upper price band of Rs 390, the issue is priced at 7.8x FY24 Market Cap to Sales and looks reasonably priced compared to Zomato which is trading at 17.5x.
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