Swiggy has received approval from its shareholders for a $1.2-billion initial public offering (IPO), as revealed in filings with the Registrar of Companies (RoC). According to the filings, the food tech giant aims to raise up to ₹3,750 crores through a fresh issue and up to ₹6,664 crores through an offer-for-sale (OFS) component.
Additionally, the company plans to secure around ₹750 crore from anchor investors ahead of its IPO. Speaking exclusively with CNBC-TV18 during the Davos World Economic Forum (WEF) 2024, Swiggy Group CEO Sriharsha Majety expressed that an IPO is an aspiration for the company, and they are actively preparing for it.
Sriharsha Majety emphasized the importance of learning from the experiences of other startups in the market over the past two years, highlighting their readiness to navigate the IPO landscape.
Swiggy’s IPO Plans
Swiggy, as per filings from Tofler and TheKredible, aims to secure around ₹750 crore from anchor investors before its IPO. The company’s regulatory filing after an Extraordinary General Meeting (EGM) stated, “…the consent and approval of the shareholders of the company be and is hereby accorded to create, issue, offer, allot and/or transfer of its equity shares up to an aggregate of ₹37,501 million by way of a fresh issue of equity shares up to an aggregate amount of ₹66,640 million by certain existing shareholders (OFS).” Reports suggest that Swiggy’s IPO will likely open for subscription later this year.
Regarding its financial standing, Swiggy reported a loss of $207 million for the nine months ending December 2023 despite generating revenue of $1.02 billion during the same period. Its fiscal year 2022-23 revenue was reported at $1.05 billion.
Swiggy Investor Strategy
Swiggy has not responded to queries from CNBC-TV18. Reports suggest the company plans to file for its IPO by May, aiming for a listing around the festive season with a valuation target between $12-15 billion. In preparation, Swiggy is reaching out to high-net-worth individuals (HNIs), offering a 20% discount on its current valuation.
Swiggy’s investor Prosus, holding around 32% of the company, intends to sell shares to lower its stake to below 25%. Other investors include SoftBank (8%), Accel (6.2%), the founder group (6.7%), Elevation Capital (4.4%), Norwest, Tencent, DST Global, and Alpha Wave, among others.
Swiggy’s Financial Strategy
Swiggy’s co-founders Sriharsha Majety, Nandan Reddy, and Rahul Jaimini hold stakes of 4%, 1.6%, and 1.2%, respectively. Jaimini shifted to another venture, Pesto Tech, in 2020. In an EGM on April 23, Majety and Reddy were appointed executive directors. Majety became managing director and group CEO, while Reddy was named whole-time director and head of innovation.
Swiggy’s food delivery segment turned profitable last year. Majety emphasized the company’s focus on profitable growth and improvement. He highlighted Swiggy’s learning curve in understanding consumer preferences and iterating accordingly. Ahead of a potential IPO, Swiggy is working on enhancing its unit economics, achieving a steady 25-30% year-on-year growth in FY24.
According to a report, Swiggy’s revenue from operations in the first nine months of FY24 was ₹5,476 crore. The company is focused on turning profitable, evident in improved EBITDA margins, which were -1.9% and -109.5% for the food delivery and Instamart businesses, respectively, during the nine-month period, compared to -17.5% and -259% in FY23.
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