India’s stock market has a rising local flavour

Local feast. Swiggy is living up to its reputation for doing things quickly. Indian food and grocery delivery company backed by Prosus and SoftBank Group will on Wednesday start taking orders for its $1.35 billion Mumbai initial public offering. It's shrugging off volatility U.S. elections could induce in markets. timing reflects both issuer's urgency and increasing role of domestic investors in $5 trillion stock market.

re are a couple of reasons to rush. Swiggy's largest rival, publicly tred Zomato , is planning to raise up to $1 billion in a secondary equity offering. $25 billion company is cashing up ahe of an entry by Mukesh Ambani 's giant conglomerate Reliance Industries into "quick-commerce", home delivery of grocery items within 10 minutes or so. What's more, India's ecomic 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 upper end of price range is less than heline figure of its last fundraising round in 2022. And it equates to a multiple of 6.6 times forward sales after annualising revenue during three months to end of June, or nearly half multiple of Zomato. neless Swiggy's shrinking premium in grey market - a metric Indian media love to shout about - implies a muted debut when stock officially starts to tre around v. 13.

Issuers can at least rely on a local cushion. Indians continue to pump ir savings into market at a time overseas investors are cashing out: foreigners sold a monthly record $11 billion of stock in October, taking Nifty 50 benchmark down 6%, though companies still tre on aver at a punchy 24 times forward earnings. downward drag would have been greater in past. Foreign ownership of stocks at 17.5% is near a 12-year low, according to data provider Primeinfobase. That makes timing of Swiggy's share sale look slightly less bold.

Context News

Indian food and grocery delivery company Swiggy will on v. 6 start accepting orders from retail investors for shares in its initial public offering. Prosus and SoftBank-backed company is seeking to raise up to $1.35 billion at a valuation of up to $10.4 billion at upper end of marketed price range, per a term sheet seen by Breakingviews.