Foodtech

Swiggy IPO Filing Likely This Weekend: Report

• ByStartupStory     |    September 20, 2024

Food and grocery delivery startup Swiggy is poised to file its draft red herring prospectus (DRHP) this weekend, as confirmed by sources familiar with the matter. The company’s confidential filing is nearing approval from the market regulator, Sebi, paving the way for its much-anticipated IPO.

Once the DRHP is filed, Swiggy’s management is set to engage in investor roadshows across India, the US, and Singapore in the coming weeks. This public issue has garnered significant attention amid a wave of new-age economy IPOs that are leveraging a thriving bull market. “The time gap between a DRHP and RHP for a confidential filing is typically lesser as the market regulator has already gone through the information,” said one insider.

While Swiggy did not immediately respond to requests for comments, industry watchers note that the company has recently upsized its IPO to $1.4 billion. This move comes amidst escalating competition in the online grocery delivery sector, where Swiggy’s platform, Instamart, faces rivals like Zomato-owned Blinkit, Zepto, and Tata-owned BigBasket.

According to estimates, India’s food delivery market is projected to grow to Rs 2 lakh crore by 2030, with Swiggy and Zomato dominating, commanding over 90 percent of the industry. While Zomato went public in 2021, Swiggy is now preparing to join its competitor in the coming months.

Key investors in Swiggy include Prosus (32 percent), SoftBank (8 percent), and Accel (6 percent), along with a host of other shareholders like Elevation Capital, DST Global, and Tencent. The company was valued at $10.7 billion during its last funding round in January 2022. However, bankers have recently expressed optimism that Swiggy can achieve a market capitalization of around $10-13 billion upon listing.

Originally expected to raise Rs 3,750 crore (approximately $450 million) through a fresh issue, Swiggy will now issue fresh shares worth Rs 5,000 crore (about $600 million). This marks an increase of Rs 1,250 crore or $150 million as it bolsters its cash reserves in a competitive market.

Swiggy was initially slated to raise $1.25 billion through its IPO, comprising Rs 3,750 crore in fresh issues and up to Rs 6,664 crore in an offer-for-sale (OFS). Following the approval of the new proposal at its extraordinary general meeting (EGM) on October 3, the total IPO size will be around $1.4 billion, with the additional $150 million sourced via a fresh issue. There are currently no plans to alter the OFS component.

In recent months, Swiggy has witnessed increased trading activity in the secondary market, with shares changing hands at approximately Rs 330-350. High net-worth individuals (HNIs) and family offices have actively been purchasing shares in the company, which was valued at $9-9.3 billion during these secondary transactions.

Follow Startup Story