National: Online food delivery platform Swiggy saw a muted response to its ₹ 11,327 crore IPO on the first day of bidding on Wednesday, as brokerages advised investors to avoid the IPO until the company's financial performance and growth outlook improve.

The IPO received bids for about 1.8 crore shares against around 16 crore shares on offer, according to the NSE data.

Till about 4 pm, Swiggy received a total of 1,78,10,182 bids as against 16,01,09,703 shares (a mere 0.11 times), as per the NSE data.

The non-institutional investors (NIIs) subscribed for 0.05 times the quota available for them, while retail individual investors (RIIs) applied for 0.52 times the total shares offered to them.

The issue will close for bids on November 8.

The Zomato rival has fixed the price band between ₹ 371 and ₹ 390. Swiggy shares will be listed on the exchanges on November 13, while the allotment of shares will take place on November 11.

According to a Choice Broking IPO note, the company has experienced net losses annually since its incorporation and depends on numerous third-party providers for various operational aspects, including payment gateways and supply chain management. Another IPO note by Geojit said that "on the profitability side, Swiggy has witnessed setbacks and has recorded negative cash flow from operations since inception".

Motilal Oswal Financial Services Ltd recommended only "High-Risk investors to 'Subscribe for long term'".

Over the past three fiscal years, the company has consistently reported losses on a consolidated basis. In FY22, the total income was ₹ 6,119.78 crore, with a net loss of ₹ 3,628.90 crore. The following year, FY23, saw an increase in total income to ₹ 8714.45 crore, but the net loss also increased to ₹ 4,179.31 crore. In FY24, the total income rose further to ₹ 11,634.35 crore, while the net loss was reduced to ₹ 2,350.24 crore. In the first quarter of FY25, ending on June 30, 2024, the company recorded a total income of ₹ 3,310.11 crore and a net loss of ₹ 611.01 crore.

"These figures indicate that the company has been experiencing continuous financial losses over the reported periods," said Bajaj Broking in its note.