India's stock market has a rising local flavour
The author is a Reuters Breakingviews columnist. The opinions expressed are his own. Updates to add graphic and refiles to fix echo in third paragraph.
By Anshuman Daga
SINGAPORE, Nov 6 (Reuters Breakingviews) -Swiggy is living up to its reputation for doing things quickly. The Indian food and grocery delivery company backed by Prosus PRX.AS and SoftBank Group 9984.T will on Wednesday start taking orders for its $1.35 billion Mumbai initial public offering. It's shrugging off the volatility U.S. elections could induce in markets. The timing reflects both the issuer's urgency and the increasing role of domestic investors in the $5 trillion stock market.
There are a couple of reasons to rush. Swiggy's largest rival, publicly traded Zomato ZOMT.NS, is planning to raise up to $1 billion in a secondary equity offering. The $25 billion company is cashing up ahead of an entry by Mukesh Ambani's giant conglomerate Reliance Industries RELI.NS into "quick-commerce", the home delivery of grocery items within 10 minutes or so. What's more, India's economic growth is slowing and consumption signals are starting to flash red.
For its part, Swiggy has scaled back its ambition. Its targeted market value of $10.4 billion at the upper end of the price range is less than the headline figure of its last fundraising round in 2022. And it equates to a multiple of 6.6 times forward sales after annualising revenue during the three months to the end of June, or nearly half the multiple of Zomato. Nonetheless Swiggy's shrinking premium in the grey market - a metric Indian media love to shout about - implies a muted debut when the stock officially debuts around Nov. 13.
Issuers can at least rely on a local cushion. Indians continue to pump their savings into the market at a time overseas investors are cashing out: foreigners sold a monthly record $11 billion of stock in October, taking the Nifty 50 .NSEI benchmark down 6%, though companies still trade on average at a punchy 24 times forward earnings. The downward drag would have been greater in the past. Foreign ownership of stocks at 17.5% is near a 12-year low, according to data provider Primeinfobase. That makes the timing of Swiggy's share sale look slightly less bold.
CONTEXT NEWS
Indian food and grocery delivery company Swiggy will on Nov. 6 start accepting orders from retail investors for shares in its initial public offering.
The Prosus and SoftBank-backed company is seeking to raise up to $1.35 billion at a valuation of up to $10.4 billion at the upper end of the marketed price range, per a term sheet seen by Breakingviews.
Graphic: Foreign ownership of Indian stocks is near a 12-year low https://reut.rs/3YBAPaj
Editing by Una Galani and Aditya Srivastav
Berita Terkini
Penafian: Entiti XM Group menyediakan perkhidmatan pelaksanaan sahaja dan akses ke Kemudahan Dagangan Atas Talian, yang membolehkan sesorang melihat dan/atau menggunakan kandungan yang ada di dalam atau melalui laman web, tidak bertujuan untuk mengubah atau memperluas, juga tidak mengubah atau mengembangkannya. Akses dan penggunaan tersebut tertakluk kepada: (i) Terma dan Syarat; (ii) Amaran Risiko; dan Penafian Penuh. Oleh itu, kandungan sedemikian disediakan tidak lebih dari sekadar maklumat umum. Terutamanya, perlu diketahui bahawa kandungan Kemudahan Dagangan Atas Talian bukan permintaan, atau tawaran untuk melakukan transaksi dalam pasaran kewangan. Berdagang dalam mana-mana pasaran kewangan melibatkan tahap risiko yang besar terhadap modal anda.
Semua bahan yang diterbitkan di Kemudahan Dagangan Atas Talian kami bertujuan hanya untuk tujuan pendidikan/maklumat dan tidak mengandungi – dan tidak boleh dianggap mengandungi nasihat kewangan, cukai pelaburan atau dagangan dan cadangan, atau rekod harga dagangan kami, atau tawaran, atau permintaan untuk suatu transaksi dalam sebarang instrumen kewangan atau promosi kewangan yang tidak diminta kepada anda.
Sebarang kandungan pihak ketiga serta kandungan yang disediakan oleh XM, seperti pendapat, berita, penyelidikan, analisis, harga, maklumat lain atau pautan ke laman web pihak ketiga yang terdapat dalam laman web ini disediakan berdasarkan "seadanya" sebagai ulasan pasaran umum dan bukanlah nasihat pelaburan. Sesuai dengan apa-apa kandungan yang ditafsir sebagai penyelidikan pelaburan, anda mestilah ambil perhatian dan menerima bahawa kandungan tersebut tidak bertujuan dan tidak sediakan berdasarkan keperluan undang-undang yang direka untuk mempromosikan penyelidikan pelaburan bebas dan oleh itu, ia dianggap sebagai komunikasi pemasaran di bawah peraturan dan undang-undang yang berkaitan. SIla pastikan bahawa anda telah membaca dan memahami Notifikasi mengenai Penyelidikan Pelaburan Bukan Bebas dan Amaran Risiko mengenai maklumat di atas yang boleh diakses di sini.
