Swiggy to Raise Rs 5,000 Cr in Fresh Issue for IPO

PC: Business Today 

Food delivery and quick commerce player Swiggy plans to raise an impressive amount of Rs 5,000 crore ($602 million) through a fresh issue related to its proposed IPO. With Prosus behind the company, Swiggy has targeted an all-total of Rs 6,664 crore via OFS and will seek board approval for the OFS in the first week of the coming month.

According to an internal document accessed by Entrackr, Swiggy’s board has approved a special resolution to issue equity shares of up to Rs 5,000 crore, subject to shareholder approval at an EGM to be convened on October 3. Since it filed the draft papers secretly back in April, anticipation has only mounted for Swiggy’s IPO. Reports say the shareholders have okayed raising Rs 10,400 crores in all.

Though the size of the IPO remains fluid, the fresh issue in the new resolution is 1.3 times bigger at the earlier estimated Rs 3,750 crore. The Bengaluru-based firm will shortly file the DRHP with the Securities and Exchange Board of India.

It has also received strategic investments in the run-up to the IPO from Amitabh Bachchan’s Family Office and Hindustan Composites, among others. Investor Baron Capital marked Swiggy at $14.5 billion recently-a pretty strong valuation, indicative of faith in the company.

Swiggy has recorded strong financials in revenue growth-36% year-on-year to Rs 11,247 crore in FY24. Its losses fell 44% to Rs 2,350 crore during the same period. Food delivery business contributed to Rs 6,100 crore revenue for Swiggy, whereas its quick commerce arm Instamart raked in Rs 1,100 crore in gross revenue during FY24.

In December 2021, to compete in the market and take on their rivals such as Zepto, along with Blinkit from Zomato, Swiggy invested $700 million in quick commerce. Key announcements over the past few months include a new chief executive and chief operating officer for Instamart – its strategic priorities regarding talent and leadership.

With a deluge of startup IPOs coming from Delhi NCR, Bengaluru is not behind the race in 2024. Along with Swiggy, other home-based companies such as Ather Energy have jumped into the IPO bandwagon, and Hero MotoCorp has abstained from participating in the OFS.

As Swiggy readies a path to its IPO and continues to innovate in the food tech space, onlookers in the industry are going to be watching every step it makes over market performance, financial growth, and strategy in this dynamic competitive sector.