Swiggy, the prominent food delivery service, is gearing up to launch its initial public offering (IPO) early next month, aiming for a valuation between $11.7 billion and $12.7 billion, as reported by Moneycontrol.
“Swiggy is currently working with an IPO valuation in the range of $11.7 billion to $12.7 billion and bids have started coming in from anchor investors,” a source disclosed in the report.
The IPO will feature a fresh issue component of ₹3,750 crore, alongside an offer for sale (OFS) of up to 182,286,265 equity shares, as outlined in the updated draft red herring prospectus-I. The primary component may be upsized to ₹4,500 crore, with potential adjustments to the OFS component depending on valuations and investor exit strategies. Another source indicated that the overall IPO size is expected to reach at least ₹12,000 crore, approximately $1.42 billion.
Confidential Filing of IPO Documents
Swiggy has filed its IPO documents confidentially, securing approval from the Securities and Exchange Board of India (SEBI) on September 24. SEBI’s new confidential filing route, introduced in November 2022, allows companies to keep sensitive information private until they finalize their IPO plans.
The company has earmarked up to ₹137 crore for investments in its subsidiary, Scootsy, to repay or prepay borrowings. Plans also include a significant investment of ₹982 crore in expanding its dark store network for the quick commerce segment, alongside making lease/license payments for these stores. Additionally, ₹586.20 crore will be allocated to technology and cloud infrastructure, while ₹929.50 crore will be invested in brand marketing and business promotion across various segments.
Key Investors and Advisory Team
Swiggy’s investor roster includes major players like Prosus, holding a 32 percent stake, followed by SoftBank (8 percent) and Accel (6 percent). Other significant shareholders include Elevation Capital, DST Global, Norwest, Tencent, Qatar Investment Authority, and Singapore’s GIC.
The investment banks advising on the IPO are Citi, JP Morgan, Kotak Mahindra Capital, Jefferies, ICICI Securities, Avendus Capital, and BofA Securities, with law firm Cyril Amarchand Mangaldas serving as the company counsel.
The document lists ten corporate selling shareholders, including Accel India IV (Mauritius), Apoletto Asia, Alpha Wave Ventures, Coatue PE Asia XI, DST EuroAsia V B.V., Elevation Capital V, Inspired Elite Investments, MIH India Food Holdings, Norwest Venture Partners VIIA-Mauritius, and Tencent Cloud Europe B.V. Individual selling shareholders include Lakshmi Nandan Reddy Obul, P.R. Venketrama Raja, Rahul Jaimini, Samina Hamied, and Sriharsha Majety.
Financial Overview and Losses
The book-running lead managers for the IPO are Kotak Mahindra Capital Company, Citigroup Global Markets India Private Limited, Jefferies India Private Limited, and Avendus Capital Private Limited, while Link Intime India Private Limited serves as the registrar for the issue.
Since its establishment in 2014, Swiggy has reported net losses annually. For FY24, the company registered losses of ₹2,350.24 crore, a decrease from ₹4,179.30 crore in FY23 and ₹3,628.89 crore in FY22. Revenue from operations for FY24 amounted to ₹11,247.39 crore, up from ₹8,264.59 crore in FY23 and ₹5,704.89 crore in FY22.
As Swiggy prepares for its IPO, all eyes will be on how it navigates the market and positions itself for growth in the competitive food delivery landscape.