Swiggy, the major food-tech enterprise, has been assigned a valuation of $14.74 billion by US investor Baron Capital, according to regulatory filings made with the US Securities and Exchange Commission on behalf of shareholders as of June 2024. This represents a marginal drop of about 2.6 percent from the last valuation of $15.1 billion in March, largely due to the rupee devaluation.
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Despite this slip, Swiggy is preparing in earnest for its long-awaited IPO. Shareholders of the Bengaluru-based firm approved its $1.25 billion IPO, and confidential papers were apparently filed with SEBI in May. It will look to raise as much as Rs 3,750 crore ($450 million) through the issue of fresh equity shares and an offer for sale worth Rs 6,664 crore ($800 million).
Swiggy has clocked Rs 5,476-crore revenue from operations for the first three quarters of FY24 with a loss of Rs 1,600 crore, sources told Entrackr. These financial numbers were reported for the first time by Entrackr in April, when the company also issued a secondary pitch.
Ahead of the IPO, Swiggy launched its fifth Employee Stock Ownership Plan liquidity program in July, valued at $65 million. The company said that across five such events, it has enabled more than Rs 1,000 crore of ESOP liquidity for employees, covering 3,200 employees.
Its key competitor Zomato is valued at USD 28.3 billion currently, data from the stock exchanges showed. Deepinder Goyal-led company clocked Rs 4,206 crore in revenues with Rs 253 crore in profit in Q1 of FY24. Zomato’s order growth was up 1.6% month-on-month in July, compared to Swiggy where orders fell by 4.6%, said a report by UBS. On a year-on-year basis, Zomato saw 29% growth versus Swiggy’s 11%.
It is a changing market for food delivery companies, and in this competitive landscape, Swiggy and Zomato are fighting for market leadership. Strategic moves by Swiggy, given the upcoming IPO and its employee-focused initiatives, better equip it with the strengthening of its position within the market and driving its growth.
It provides Swiggy, once listed, with a robust digital infrastructure and a large customer base that may be used to attract investors for its expansion plans. This IPO is going to help Swiggy raise capital for increasing the capacity of its operations and also provide an exit to some of the existing shareholders.
While this drop in valuation of Swiggy to $14.7 billion is remarkable, its strategic moves and growth potential are not really shadowed. Preparing for an IPO, the company remains keen on ensuring value for its stakeholders and the sustenance of an edge in this fast-moving food-tech industry. It is well-positioned to handle all challenges and opportunities that will come its way.
