New Delhi. Food delivery app Swiggy's IPO will be launched on November 6. The company plans to raise Rs 11,327.43 crore through the IPO. 11.54 crore new shares will be issued in Swiggy's IPO. Their value will be around Rs 4,499 crore. Apart from this, shares worth Rs 6,828 crore will be offered through offer for sale.

The company has fixed a price band of ₹371 to ₹390 for the IPO. Swiggy's valuation is currently $11.3 billion. Whereas its competitor Zomato's market cap was $13 billion when its IPO came. Since then, Zomato's market cap has almost doubled to $25 billion. Now market experts are comparing these two companies. Questions are arising about whether people should invest in Swiggy's IPO or buy Zomato shares.

Who is better for investment?
According to a report published in Mint, experts believe that Zomato is ahead in this race. StoxBox research analyst Akriti Mehrotra has said that Zomato has an edge due to its large size, profitability, and better growth indicators. Mehrotra said that Zomato's gross order value (GOV) annual growth rate (CAGR) is 23%, which is much higher than Swiggy's 15.5%. Zomato's average order value is also better than Swiggy's, which reflects its operational effectiveness.

Regarding the upcoming Swiggy IPO, Mehrotra believes that it will allow the company to expand, but it will be important to see how the company uses its resources to compete with Zomato. Swiggy's ability to expand its 'dark stores' in the quick commerce sector and increase basket size will be crucial to the success of the IPO, which may impact its market share and profitability.

Advice to be cautious while investing in Swiggy IPO
According to Anshul Jain, Head of Research, Lakshmisgree Investment and Securities, investing in Zomato shares may be a better option than Swiggy IPO. Jain says that Swiggy IPO is like an exit opportunity for pre-IPO investors through Offer for Sale (OFS). He says that Swiggy is currently incurring losses and there is uncertainty about its profit. On the other hand, Zomato is a stable and profitable company, which is making profits on almost the same revenue while Swiggy is in loss. Jain has set a target of ₹ 550 per share for Zomato in two years, which makes it attractive for investors.

Swiggy faces a challenging situation.
According to Jatin Kaithvalappil, Assistant Vice President, of Choice Broking, Swiggy's IPO is at a reasonable valuation, but the company is suffering losses and its cash flow is lacking. Kaithvalappil said that Swiggy has around 45% market share in food delivery, but in instant commerce, it is around 25%. In contrast, Zomato is performing better with its more stable and profitable model. He advised that investors invest cautiously in Swiggy and focus on investing more in Zomato.

Zomato's performance
Zomato's shares have been under pressure recently, but it has given good returns to investors since its listing. Its shares have fallen by 11% in a month, while they have climbed by 23% in the last six months. Zomato has registered a growth of over 95% so far in the year 2024 and has given a return of over 109% in the last one year.