In recent months, Swiggy IPO has been the talk of the town, especially regarding its unlisted shares. Before Swiggy officially launches its IPO (Initial Public Offering), many investors, including celebrities, are rushing to buy these shares. But why? Is it a good idea for you to invest too? Let’s break down everything you need to know about Swiggy’s shares in simple terms.
What’s the Buzz About Swiggy?
Swiggy is one of India’s largest food delivery platforms, competing with Zomato. Recently, big celebrities like Madhuri Dixit, Karan Johar, and Amitabh Bachchan have purchased Swiggy’s shares in the unlisted market. Reports suggest that around 2 lakh shares have been scooped up by these famous personalities.
But why are so many people interested? The answer lies in Swiggy’s upcoming IPO. Investors believe that the price of Swiggy’s shares will skyrocket after the IPO, making this a tempting opportunity.
Unlisted Market: What Does It Mean?
Before Swiggy’s shares hit the public market through the IPO, they can be traded in the unlisted market. It’s like a pre-sale of shares for early investors. Currently, Swiggy’s unlisted shares are selling for ₹400-500 per share. However, buying unlisted shares is not as straightforward as buying shares from the stock market, and it comes with more risks.
Is It a PR Move for Swiggy’s IPO?
Let’s think about it:
- Celebrities Creating Buzz: When big names like Madhuri Dixit or Amitabh Bachchan invest in something, it naturally draws public attention. People start to believe that if well-known and successful individuals are putting their money into Swiggy, it must be a smart investment. This generates hype and makes retail investors curious about Swiggy’s IPO.
- Media Coverage: The fact that these celebrity investments are being widely covered in the media is not a coincidence. Swiggy or its investors may be using these stories as a way to build anticipation for the IPO. This media attention could be positioning Swiggy as the next big thing in the stock market, leading more people to get excited about buying shares when the IPO opens.
- Creating FOMO (Fear of Missing Out): The publicizing of celebrity purchases could also be a way to create a sense of urgency or FOMO. The idea is that if big investors and celebrities are buying in now, others might feel they need to act quickly to get a slice of the pie before the IPO.
- Brand Boost Before the IPO: This kind of news doesn’t just impact Swiggy’s IPO prospects, but it also strengthens the brand. The more people hear about Swiggy in the news, the more it builds trust and makes the brand look even more credible in the eyes of the public.
Why Swiggy is Getting So Much Attention
Swiggy’s Valuation Growth
Swiggy was valued at $10.7 billion in 2022 after raising funds. Experts are now estimating that Swiggy’s valuation will rise to around $14-15 billion after the IPO. For investors, this potential growth is very attractive. The hope is that buying shares now will lead to large profits later, as the company grows in value.
Growth in Quick Commerce
Swiggy isn’t just about food delivery anymore. It has entered the quick commerce space with its Instamart service, which offers ultra-fast grocery and essentials delivery. This area of business has massive growth potential, and investors are hoping it will push Swiggy’s value even higher in the future. Competitors like Zepto and Zomato (via Blinkit) are also in the race, but Swiggy has a solid base of loyal customers to leverage.
Zomato vs Swiggy: The Battle for Market Share
While Zomato and Swiggy are neck-and-neck, Swiggy holds 45% of the food delivery market, while Zomato has 55%. Swiggy’s quick commerce service could help close this gap. Investors see this as an opportunity, with hopes that Swiggy’s IPO could boost its market presence and revenue further.
Zomato’s Strong Customer Loyalty
Zomato, Swiggy’s biggest competitor, has built a strong customer base thanks to its intuitive app, attractive discounts, and wide delivery network. These factors have played a huge role in Zomato’s growth and success, giving investors confidence in its long-term profitability.
Zomato’s marketing has been especially successful at targeting younger audiences with creative notifications and promotions. In addition, its move into quick commerce with Blinkit has further strengthened its position in the market.
On the other hand, Swiggy is still working on building profitability, but its push into new areas like quick commerce with Instamart shows it is aggressively expanding, which makes its IPO exciting for investors.
Why Investors Are Excited About Swiggy’s IPO
A major reason people are jumping into Swiggy’s shares is the belief that the IPO will unlock tremendous value. With celebrities and large investors putting their money into Swiggy, many are expecting the IPO to bring significant returns. Investors are betting that Swiggy’s stock will see a big jump in value once the shares become available to the public.
Should You Buy Swiggy’s Unlisted Shares?
While all this sounds exciting, investing in unlisted shares isn’t without risk. Here’s why you should think carefully before diving in:
- Liquidity Problems: Once you buy unlisted shares, selling them is not as easy. You may need to wait for the IPO or find another buyer, which could take time.
- Uncertain Profits: Swiggy is not profitable yet. Even though the company is growing, there’s no guarantee that the stock price will rise immediately after the IPO. If Swiggy’s performance doesn’t meet expectations, the value of the shares could fall.
- Lack of Transparency: Information about unlisted companies is often not as readily available. Unlike listed companies, you don’t have full visibility into Swiggy’s finances until after the IPO.
- Better Options for New Investors: If you’re new to investing, it’s often safer to put your money into listed stocks (companies already on the stock exchange) where the risks are lower. Listed companies are regulated and provide more liquidity, meaning you can buy and sell shares more easily.
Conclusion
It’s entirely possible that the buzz around celebrities buying Swiggy’s shares is part of a carefully crafted PR strategy to make the upcoming IPO more attractive. By linking the Swiggy brand with trusted and famous figures, the company might be trying to build more credibility and excitement among potential investors.
That said, it’s crucial for investors to separate hype from reality. Just because there’s a lot of noise around Swiggy doesn’t mean you should rush into buying shares. Take the time to understand the risks and do your own research before deciding if Swiggy’s IPO is the right investment for you.
© The hammer trader