Swiggy Lowers IPO Valuation; CPPIB Invest in $1.4B Deal

Swiggy’s decision to lower its IPO valuation to $11.3 billion, coupled with investments from BlackRock and CPPIB, is a unique development reflecting the impact of current market conditions on high-profile IPOs in India. Here’s what stands out:

1. Significant Valuation Cut: Swiggy initially targeted a $15 billion valuation for its IPO, but market volatility has pushed it to adjust that expectation to $11.3 billion—a notable 25% reduction.
2. Big-Name Investors on Board: Despite the valuation cut, global investment giants BlackRock and the Canada Pension Plan Investment Board (CPPIB) are committing to the IPO. Their involvement shows confidence in Swiggy’s long-term potential despite immediate challenges.
3. Timing Amid Market Downturn: Swiggy’s IPO comes amid India’s longest stock market downturn since August 2023, with foreign investor outflows and volatility impacting other listings. The recent underperformance of Hyundai India’s IPO highlights these market challenges.
4. Quick-Commerce Race with Zomato: Swiggy and competitor Zomato are expanding into “quick-commerce” with 10-minute delivery options, a high-growth area that Swiggy hopes will attract investor attention even in a bearish market.
5. Pre-Election Uncertainty in the U.S.: Swiggy’s IPO is set against the backdrop of the upcoming U.S. presidential election on November 5, which could add another layer of global market uncertainty impacting investor sentiment.

These factors make Swiggy’s IPO one of the most closely watched events in India’s stock market, both for its scale and for how it navigates a complex financial landscape.

Swiggy has lowered its IPO target valuation to $11.3 billion amid market volatility, reducing it by 25% from its initial $15 billion goal. Investment firms BlackRock and the Canada Pension Plan Investment Board (CPPIB) are expected to back the $1.4 billion IPO, making it one of India’s biggest this year, according to sources.

Indian markets have been on a downward streak, impacting Swiggy’s approach. Hyundai India’s recent IPO faced a similar struggle, and Swiggy aims to avoid the same fate by adjusting its expectations. The company, also backed by SoftBank and Prosus, last raised funds at a $10.7 billion valuation in 2022 and is a major competitor to Zomato in India’s food delivery market.

Indian food delivery giant Swiggy has once again lowered its IPO valuation, now targeting $11.3 billion, marking a 25% reduction from its initial $15 billion ambition. The adjustment reflects ongoing market volatility and a tepid reception to Hyundai India’s recent listing, according to two sources familiar with the matter.

The IPO, expected to raise $1.4 billion, will be India’s second-largest public offering of the year. Notably, investment giants BlackRock and the Canada Pension Plan Investment Board (CPPIB) are set to participate, the sources told Reuters. Neither Swiggy nor its key backers, BlackRock and CPPIB, have commented on the matter outside business hours.