Bombay (awp/afp) – The Indian internet delivery company Swiggy, the second largest IPO of the year in Bombay on Wednesday, saw its action start with a bang with a jump of 10%.
The fifth largest economy in the world has been experiencing a frenzy of operations of this type for two years, with start-ups or more established companies taking advantage of the boom in the Indian stock market to collect or raise billions of dollars at incredible valuations. .
Swiggy and its shareholders, including the Japanese giant Softbank, have just pocketed 1.34 billion dollars (113.14 billion rupees), of which 66 million will be used to expand the network of decentralized warehouses which allows its dozens of thousands of delivery people serve its customers in less than 20 minutes.
The stock was trading at $5.1 (Rs. 430.15) on Wednesday morning, about 10% above the issue price.
India sees “considerable economic growth” on offer, which “will obviously manifest itself in the cities” and thus benefit a company like Swiggy, underlined its managing director Sriharsha Majety, during the entry ceremony on the stock market.
Like many of its competitors, Swiggy has gone beyond food delivery services to focus on an all-round offering, ranging from groceries to electronics.
Analysts, however, have warned investors, reminding them of the fierce competition from Zomato, the sector leader in India, and another rival, the unlisted group Zepto.
Swiggy began by focusing “on internal innovation”, which “gave it an advantage, but competitors like Zomato and Zepto have since overtaken it in food delivery and fast commerce”, wrote Ninad Sarpotdar , analyst at Aditya Birla Capital.
Another risk factor, according to this analyst, is the “slightly high” valuation for a company that is not yet profitable.
In the second quarter, Swiggy widened its net loss to $72.3 million, but hopes to ultimately reduce it thanks to an increase in its sales.
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