SUMMARY
Prosus has been actively seeking to reduce its ownership stake in Swiggy from the existing 33% to below 26%
According to Indian regulations, a shareholder holding 26% or more is classified as a promoter, subjecting them to certain restrictions on the sale of shares post the initial public offering
Prosus, having made an investment of approximately $1 Bn in Swiggy, is actively working towards shedding the promoter designation
As swiggy
gears up to list itself on the stock exchanges, in what is being called the biggest IPO by an internet company with an issue size of $1 Bn (INR 8,300 Cr), the foodtech major’s largest shareholder Prosus might be tagged as a promoter.
The Dutch investor has been actively seeking to reduce its ownership stake in Swiggy from the existing 33% to below 26%. Despite engaging in discussions with potential investors, it is yet to yield outcomes, ET reported.
According to Indian regulations, a shareholder holding 26% or more is classified as a promoter, subjecting them to certain restrictions on the sale of shares post the initial public offering (IPO).
“Prosus has been in talks with several investors to dilute the stake in Swiggy as part of a broader strategy to do secondaries (sale of shares) across portfolio firms, but it hasn’t worked out due to a valuation mismatch in Swiggy,” a source said as quoted in the report.
Prosus, having made an investment of approximately $1 Bn in Swiggy, is actively working towards shedding the promoter designation. This move aims to provide Prosus with greater flexibility in managing its investment post the initial public offering (IPO) of Swiggy.
This year is set to witness IPOs from around 10 tech startups, but all eyes are on Swiggy and Ola Electric as their offerings are already creating a buzz in the market.
Swiggy’s IPO is anticipated to take place in mid-2024.
Founded in 2014 by Sriharsha Majety, Nandan Reddy, Phani Kishan Addepalli, Rahul Jaimini, Swiggy has raised $3.6 Bn funding to date.
Swiggy CEO Sriharsha Majety claimed last year that the company’s food delivery business achieved profitability (without factoring ESOP costs) as of March 2023. However, Swiggy reported a consolidated loss of INR 3,629 Cr in FY22 on a revenue of INR 5,704.9 Cr.
