Renowned Bollywood actress Madhuri Dixit, along with Ritesh Malik, founder of Innov8, has purchased shares of food delivery giant Swiggy worth Rs 3 crore from the secondary market ahead of Swiggy's planned USD 1.5 billion IPO. According to Moneycontrol, shares were bought by them at Rs 345 per scrip and the transaction was facilitated by Swiggy's investment banker Avendus.
What Does Dixit's Move Indicate?
As of September 16, 2024, 61 IPOs had hit the market in 2024 with an average return of around 60.30 per cent. As many as 5 mainboard IPOs, including Bajaj Finance, had listing gains above 100 per cent, which may also have created FOMO among investors and may have motivated Dixit to invest in Swiggy ahead of its IPO.
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Also, this suggests that Dixit believes in Swiggy's valuation and that it will give capital appreciation once the company goes public. Swiggy and Zomato dominate India's food delivery market with a combined market share of about 90-95 per cent. Swiggy's valuation is around USD 9.3 billion, while Zomato is worth over USD 29 billion. Both companies are also expanding into quick commerce services to compete with other players in the market. They compete with other players such as Zepto, Tata Big Basket, and Flipkart Minutes for delivery of everyday items like groceries, household essentials, etc. This sector also saw significant growth as consumers increasingly sought convenient and fast delivery options for their everyday needs.
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Swiggy's revenue was up 36 per cent to Rs 11,247 crore in the financial year 2023-24, with losses down 44 per cent to Rs 2,350 crore. Meanwhile, Zomato's revenue was Rs 12,114 crore, and it made a Rs 351 crore profit in the same period.
Another factor for interest in Swiggy IPO can be the success of Zomato's IPO. From its listing in 2021, its shares jumped over 120 per cent tol date. What personal finance enthusiasts should learn is Dixit's strategy to diversify her investment portfolio beyond the entertainment industry.
