Delivering returns

Swiggy will have to convert growth into profitability

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The Swiggy initial public offering (IPO) saw a retail subscription of 1.14 times and qualified institutional buyer segment subscription of around six times. The stock listed at a premium of 8 per cent and ended the day's trade with nearly a 17 per cent gain over the issue price. The ₹11,327 crore issue included an offer for sale of existing equity worth about ₹6,828 crore and a fresh equity issuance of ₹4,499 crore. The proposed breakup of allocation is dark store expansion (about 26 per cent), brand promotion (24.8 per cent), tech and Cloud (15.6 per cent), and funding inorganic growth plus general corporate expenses (29.7 per cent). This makes the priorities clear for Swiggy, which is likely to face increasing competition, albeit in under-penetrated markets. Quick commerce (qcom) is a major focus area and the company is open to acquisition for expansion.