Swiggy, the Indian food delivery and quick commerce giant, has filed its draft papers for an initial public offering (IPO), aiming for a valuation of $10 billion (₹83,365 crore). The company is looking to raise ₹10,000 crore through the offering, with ₹3,750 crore coming from fresh issues. The Bengaluru-based company, founded in 2014, is backed by major investors such as Japan’s SoftBank and Prosus. Swiggy’s IPO comes as the company seeks to expand its operations and strengthen its position in India’s highly competitive food delivery and quick commerce markets.
Swiggy’s IPO plan took a significant step forward when the company received clearance from the Securities and Exchange Board of India (SEBI) earlier this week. In its updated draft red herring prospectus, Swiggy revealed that its existing shareholders, including Tencent Europe and Accel India, plan to sell approximately 18.5 crore shares as part of the offer for sale (OFS). The combined size of the IPO is expected to exceed ₹10,000 crore. Swiggy’s valuation was close to $13 billion as of April 2023, and the company employs over 4,700 people.
The fresh funds raised from the IPO will be used to support various initiatives. Approximately ₹137.41 crore will go towards repaying the debt of its subsidiary, Scootsy, a quick commerce service. Additionally, ₹982.4 crore will be invested to expand Scootsy’s dark store network. Out of this amount, ₹559.1 crore will be allocated for setting up new dark stores, while the rest will cover lease or license payments. Swiggy also plans to invest ₹586.2 crore in enhancing its technology and cloud infrastructure, and ₹929.5 crore will be dedicated to brand marketing and business promotion. The remaining proceeds will be used for inorganic growth and general corporate purposes.
Swiggy’s IPO filing coincides with a booming IPO market in India. According to Reuters, 198 companies have raised $7.1 billion in the IPO market in 2023, more than doubling the amount raised during the same period last year. Swiggy’s closest competitor, Zomato, went public in 2021 and has seen strong performance in the stock market over the past year, intensifying the rivalry between the two food delivery giants.
As Swiggy prepares to enter the public market, its IPO will be closely watched, given the growing appetite for tech-driven businesses in India and the success of previous tech IPOs. With the funds raised, Swiggy aims to solidify its presence in the food delivery and quick commerce segments, while competing against other market leaders.
