With INR 8.3K Cr IPO On The Platter, Swiggy Likely To File Draft Papers This Week

With Swiggy considering increasing the size of its initial public offering (IPO), the foodtech major is now reportedly gearing up to file its draft red herring prospectus (DRHP) with the capital markets regulator SEBI as early as this week.

As per Bloomberg’s report, citing people close to the matter, the details of the offering, including its size and timing are still under discussion and are subject to change. 

According to the ongoing buzz, the Bengaluru-based Swiggy is likely to raise $1.04 Bn (INR 8,387 Cr) from its IPO. The diversified food biz startup is waiting to get approval from the markets regulator to proceed with the IPO filing, the people said.

For the uninitiated, Swiggy filed for an IPO  via a confidential pre-filing route with the SEBI in April, aiming for a fresh issue of equity shares worth INR 3,750 Cr ($450 Mn) and an offer-for-sale (OFS) component worth INR 6,664 Cr. 

Introduced by SEBI in November 2022, the confidential filing route allows companies to submit their DRHP without making the details public initially. This is different from the traditional filing process, where the DRHP is immediately available for public scrutiny.

Last week, it was reported that Swiggy plans to get shareholders’ nod to raise INR 5,000 Cr (about $600 Mn) through a fresh issue of shares and raise a total of $1.4 Bn through its IPO.

It was looking to obtain the shareholder’s nod at its extraordinary general meeting (EGM), scheduled on October 3.

Founded in 2014 by Sriharsha Majety, Nandan Reddy, Phani Kishan Addepalli, and Rahul Jaimini, Swiggy started off as a food delivery startup but later forayed into the quick commerce segment with Instamart.

It also offers services such as Swiggy Genie and Minis stores.

This expedition in public filing is in alignment with the public listing of several new-age startups in recent times. 

While startups like Ecom Express and Smartworks are eyeing a market debut in the upcoming months, Go Digit General Insurance, FirstCry, Unicommerce, TBO Tek, Ola Electric, Awfis, ixigo, Menhood, TAC Security and Trust Fintech, have already debuted on bourses in 2024.

Swiggy’s IPO comes despite the company‘s failing to turn profitable. However, its counterpart, Zomato has been consistently improving its profit margins since first turning profitable in Q1 FY24.

But the silver lining is that the food tech major has managed to trim its losses in FY24. The total loss amounted to Rs 2,350.2 Cr for the year 2023-24 (FY24), a 43% slump over the INR 4,179.3 Cr loss in FY23.

On the market share front, Swiggy’s quick commerce arm Instamart has been losing its chunk to competitors Blinkit and Zepto. 

While Zomato’s Blinkit is currently the market leader in the space, Zepto has raised millions of dollars in funding in recent months.

The competition is further intensified with Walmart-backed ecommerce major Flipkart having recently joined the quick commerce race with Flipkart Minutes. 

Meanwhile, Tata-owned BB Basket is also fully pivoting to a quick commerce model.

Even on the food delivery front, Goldman Sachs has estimated that Zomato holds a 56-57% market share in the food delivery market.