Swiggy's Rs 10,000 crore IPO marks the largest offering among new-age companies after Paytm's record-breaking Rs 18,300 crore IPO in 2021.

Swiggy files for Rs 10,000 crore IPO: Here's all you need to know

Swiggy's IPO will consist of two main parts: a fresh issue of equity shares worth Rs 3,750 crore, and an offer for sale (OFS) of 18.52 crore shares by existing stakeholders.

27 Sep 2024, 10:07 by Koustav Das · India Today

In Short

Swiggy files papers with Sebi for Rs 10,000 crore IPO
IPO funds to expand Instamart's quick commerce dark stores
Investor Prosus leads sale, offloading shares worth over $500 million

Leading online food delivery platform Swiggy has filed updated draft papers with the Securities and Exchange Board of India (Sebi) for a Rs 10,000 crore initial public offering.

The move positions Swiggy to challenge its rival, Zomato, which has been a favourite among investors since its own listing in 2021.

Swiggy's IPO will consist of two main parts: a fresh issue of equity shares worth Rs 3,750 crore, and an offer for sale (OFS) of 18.52 crore shares by existing stakeholders.

The company, in an extraordinary general meeting (EGM), has proposed to raise the fresh issue to Rs 5,000 crore ($600 million).

Investors

Investors such as Prosus, Accel, Tencent, and Elevation Capital are expected to partially sell their stakes through the OFS route. Notably, SoftBank, a significant backer, will retain its holdings and refrain from selling in this offering.

Prosus, which holds a 30.95% stake in Swiggy, will offload around 118.2 million shares worth over $500 million, accounting for over 60% of the entire OFS. This strategic sale makes Prosus a key player in Swiggy’s public listing journey.

Biggest IPO since Paytm

Swiggy's â¹10,000 crore IPO marks the largest offering among new-age companies after Paytm's record-breaking â¹18,300 crore IPO in 2021. It edges out Zomato's â¹9,375 crore listing in 2021 and more recently, Ola Electric’s â¹6,146 crore issue in August 2024. Other notable IPOs include FirstCry, Go Digit, and Ixigo, which have also gone public as India’s startup ecosystem matures.

Allocation of funds

A significant portion of the funds raised through the IPO will be channelled into expanding Swiggy's quick commerce vertical, Instamart.

The company has earmarked Rs 982.4 crore for this purpose, including Rs 559.1 crore for setting up dark stores and Rs 423.3 crore for leasing or licensing them.

These dark stores, essential for fulfilling ten-minute delivery promises, are expected to give Swiggy a competitive edge in a sector increasingly crowded with players like Zepto, Zomato's Blinkit, and Tata-owned BigBasket.

Swiggy’s financial performance

In the June quarter of FY25, Swiggy reported a 34% rise in operating revenue, reaching Rs 3,222 crore.

However, the company’s net losses widened to Rs 611 crore from Rs 564 crore, largely due to aggressive competition in the quick commerce sector.

Despite this, Swiggy's Instamart recorded a significant boost, with the number of dark stores growing to 557 and gross order value surpassing Rs 2,724 crore—a 50% increase.

Valuation and funding

Swiggy’s last funding round in January 2022 pegged the company’s valuation at $10.7 billion.

Since then, crossover investors like Invesco and Baron Capital have revised Swiggy’s fair value to approximately $15 billion, signaling strong confidence in the company’s growth potential.

Competition with Zomato

As Swiggy prepares for its IPO, its main competitor Zomato continues to thrive in the public markets.

Zomato’s stock has risen over 125% year-to-date, driven in part by its quick commerce arm, Blinkit.

Zomato reported a net profit of Rs 253 crore in Q1 FY25, with operating revenue soaring by 74% to Rs 4,206 crore. Blinkit, with its growing network of 639 dark stores, is a crucial component of Zomato’s success, with plans to expand to 2,000 stores by 2026.

Pre-IPO buzz and share price surge

Swiggy’s shares in the unlisted market have surged by nearly 40% in recent months, climbing from Rs 355 in July to Rs 490 in September. This pre-IPO frenzy has attracted high-profile investors, including celebrities such as Rahul Dravid, Amitabh Bachchan, and Karan Johar, further fuelling excitement around the upcoming listing, which is expected to take place in November.

As Swiggy takes its first steps toward going public, the company is not only seeking to raise capital but also solidify its standing in India’s fiercely competitive quick commerce and food delivery markets.