India's second-largest IPO of the year: Food delivery service Swiggy aims for its stock market debut on Wednesday, targeting a valuation of $11.2 billion. However, given the weak earnings of many companies and the recent 3.5% losses in the Indian Nifty 50 index, investor interest is proving to be subdued.

Although Swiggy's stock offering was oversubscribed more than three times, the response is below what previous Indian IPOs achieved. Just shortly before, Hyundai disappointed with a weak IPO of its India division valued at 3.3 billion dollars.

Swiggy, which has been operating in the Indian food delivery industry for over ten years, recorded an 8 percent increase in losses to 6.1 billion rupees in the second quarter of 2024. Swiggy faces stiff competition from market leader Zomato and new challengers like Zepto. Despite the losses, the company is focusing on its fast grocery delivery service, which now accounts for 40 percent of its revenue and runs through a network of over 500 "dark stores.

Critics such as analyst Karan Taurani from Elara Capital consider Swiggy's IPO valuation approach to be "fair," but emphasize that this leaves little room for price gains. However, Swiggy itself highlights its revenue growth and plans to invest 12 billion rupees from the IPO in expanding its dark store infrastructure.

Although the IPO wave in India has been able to mobilize substantial amounts of domestic capital so far, investors remain skeptical. "The concerns about the IPO market are real," said Nirgunan Tiruchelvam, Head of Consumer and Internet at Aletheia Capital. Indian consumer goods manufacturers are already suffering from the declining purchasing power of the middle class, which further hampers the capital flow into new listings.

Swiggy remains confident in establishing itself in a growing market. According to JM Financial, the Indian rapid delivery market, supported by increasing demand for convenient delivery services, could reach a volume of 40 billion dollars by 2030.