Swiggy IPO: India’s online food delivery giant, Swiggy has filed a draft prospectus with market regulator SEBI to launch its initial public offering (IPO) in the primary market. The IPO is going to be a mixture of a fresh issue worth Rs 3,750 crore and an offer for sale (OFS). Swiggy’s IPO is proposed to be listed on BSE and NSE and would rival the largest food delivery company, Zomato Ltd.

Here are 10 key points to know about the IPO:

1. Swiggy filed DRHP on September 26 for an IPO that is comprised of Rs 3,750 crore fresh issue and an offer for sale of up to 185,286,265 shares.

2. Selling shareholders in the OFS will be Accel India IV (Mauritius), Apoletto Asia, Alpha Wave Ventures LP, Coatue PE Asia XI LLC, DST EuroAsia V B.V, Elevation Capital V, Inspired Elite Investments, MIH India Food Holdings B.V., Norwest Venture Partners VIIA-Mauritius, and Tencent Cloud Europe B.V.

3. Of the total issue size, 75% of the IPO will be allocated to qualified institutional buyers (QIBs), while 15% of the offer will be reserved for non-institutional investors(NIIs) and the rest of 10% will be allotted to retail individual investors (RII).

4. Booking running lead managers for the IPO are Kotak Mahindra Capital Company, JP Morgan India, Citigroup Global Markets, BofA Securities, Jefferies India, ICICI Securities, and Avendus Capital. The registrar of the IPO is Link Intime India.

5. The proceeds of the fresh issue will be used for – investment in its material subsidiary, Scootsy, for repayment or pre-payment of certain borrowings; expansion of its Dark Store network for Quick Commerce segment through setting up of Dark Stores and making lease/license payments for Dark Stores; investment in technology and cloud infrastructure; brand marketing and business promotion expenses for enhancing the brand awareness and visibility of its platform across segment; and funding inorganic growth through unidentified acquisitions and general corporate purposes.

6. The net proceeds from OFS will be utilised by selling shareholders mentioned above.

7. Swiggy aims to continue increasing the geographical overlap of its various offerings including Food Delivery and Quick Commerce to fuel cross-selling opportunities on the platform. Also, to further improve the basket size for Quick Commerce, Swiggy plans to work with the merchant partners to offer more product assortments on its platform by adding new product categories such as beauty and grooming, pet supplies, baby care, electronics and wearable devices, among others, and increase the assortment of premium products.

8. Swiggy also plans to continue improving our contribution margins by reducing the net discounts provided to consumers on delivery costs, on the back of increased user propensity to place a higher value on convenience. Swiggy believes that it will be able to further optimise net delivery costs by lowering the distance travelled by delivery partners per order and improving delivery fleet utilisation.

9. As of June 30, 2024, Swiggy’s revenue from operations stood at Rs 32,222.17 million, compared to Rs 23,898.18 crore as of June 30, 2023. In FY24, the company’s revenue was at Rs 112,473.90 million versus Rs 82,645.96 million in FY23. The net worth of Swiggy is at Rs 74,449.92 million by the end of the June 2024 quarter compared to Rs 86,605.97 million in the same period a year ago. In FY24, the net worth was at Rs 77,914.61 million, and the total income was Rs 116,343.49 million higher compared to the net worth and total income of Rs 90,566.12 million and Rs 87,144.53 million in FY23.

10. The online Food Delivery market and the Quick Commerce market in India are expected to grow at a CAGR of approximately 17 to 22% and 60 to 80%,
respectively, from 2023 to 2028, according to the Redseer Report. Also, the penetration of Quick Commerce in the overall retail market in India is expected to become more than six times to approximately 2-3% by 2028, with Quick Commerce as a percentage of overall online retail expected to increase from 4.8% in 2023 to between 17% and 30% in 2028, with significant headroom for future growth, as per the report in the draft. Swiggy aims to build innovative solutions that deliver unparalleled convenience to urban users.

Swiggy is a new-age, consumer-first technology company offering users an easy-to-use convenience platform, accessible through a unified app – to browse, select, order and pay for food (“Food Delivery”), grocery and household items (“Instamart”), and have their orders delivered to their doorstep through our on-demand delivery partner network.