Swiggy’s public debut will test India’s appetite for $1B+ IPOs

Swiggy’s upcoming IPO on Wednesday will finally give many analysts a public comparable for what has been long considered to be the Indian internet stock: Zomato. It will also test the nation’s appetite for IPOs that can scale past the $1 billion mark.

For its IPO, Swiggy has already secured $1.4 billion from institutional investors including Norway’s sovereign wealth fund, BlackRock and eight of the top 10 Indian mutual funds. Still, it will enter a public market where large tech companies’ stocks have struggled historically. Three years since its $2.5 billion offering, Paytm is still trading 47% below its IPO price.

More than a dozen Indian tech startups have gone public in the last four years, but the market has shown scant interest in large IPOs. Beauty and wellness e-commerce company Nykaa is still trading 53% below its debut price, and Star Health and Alliance Insurance Company remains 48% below its IPO price three years on. Startups that raised less than $500 million in India have performed incredibly well, in comparison.

India has emerged as a hotbed for tech IPOs this year even as the U.S. market remains muted. All eyes are on Swiggy’s IPO at the moment, particularly as many growth-stage startups — and their investors — are eyeing a similarly large listing over the next 24 months.

Furthermore, for many Indian startups that were based in the U.S. and Singapore, moving their official HQs back to India would let them better comply with local regulations to do such an IPO. It’s also an opportunity to reap the benefits of a market whose benchmark index had risen more than 10% in the past year. Up to three dozen startups could be shifting their domiciles back to India in the coming years, according to investors.