Swiggy, a food and grocery delivery platform, has received authorization from the market regulator for its planned $1.25-billion public issue, according to investment banking sources who spoke to The Economic Times. This development reflects the increasing interest in contemporary investment opportunities in a country experiencing significant consumer growth.
The Bengaluru-based company submitted draft papers for the Initial Public Offering (IPO) with the Securities and Exchange Board of India (Sebi) via the confidential filing route in April of this year. Swiggy is now required to file an updated draft red herring prospectus (UDRHP) with the market regulator. A 21-day public feedback period on the UDRHP will precede the IPO launch.
The IPO is anticipated to generate ₹3,750 crore (approximately $450 million) in new capital, supplemented by an offer-for-sale (OFS) component of up to ₹6,664 crore (around $800 million). Bankers indicated that the size of the public issue might be increased before its launch.
Significant investors, including Prosus, Swiggy’s largest shareholder with a 33% stake, and SoftBank, are expected to divest a portion of their holdings through the OFS. Other notable shareholders include Accel, Elevation Capital, Meituan, Tencent, Norwest Venture Partners, DST Global, Coatue, Invesco, and GIC. Swiggy did not respond to queries from The Economic Times regarding this matter.
In the first three quarters of FY24, Swiggy reported revenue of ₹5,476 crore, accompanied by a loss of ₹1,600 crore. Zomato, a primary competitor, reported revenue of ₹12,114 crore for the fiscal year ending March 31, 2024, and achieved a net profit of ₹351 crore during the same period. Zomato raised ₹9,375 crore through its IPO in July 2021, with its stock appreciating 192% over the past year, compared to a 32% increase in the Nifty. Shares of Zomato, initially priced at ₹76 each during the IPO, closed at ₹291.70 on Tuesday.
Sebi introduced the ‘pre-filing’ route in 2022, enabling companies to maintain confidentiality for preliminary filings. This route offers companies enhanced flexibility in determining the issue size, permitting adjustments of proposed fresh shares by up to 50% until the updated DRHP is submitted.