Swiggy IPO: Food Delivery Giant Sets Price Band Swiggy’s initial public offering (IPO) has started off strongly, with the food and grocery delivery company’s anchor book garnering significant interest from both domestic and international investors. The anchor book, which raised $600 million, was oversubscribed 25 times, attracting bids totaling $15 billion.

Prominent investors, including Fidelity, Capital Group, and Norges Bank Investment Management, are eager to participate in the IPO. Swiggy Group CEO Sriharsha Majety highlighted in an interview that the quick commerce segment, particularly their Instamart service, could surpass the food delivery business in growth potential. The majority of the funds raised will be used to expand Instamart’s dark store operations, which are rapidly growing in demand. The anchor book will remain open until November 5, while the IPO subscription period is set to begin on November 6 and end on November 8.

Swiggy submitted its red herring prospectus to the Securities and Exchange Board of India (Sebi) on Tuesday. The shares are priced between Rs 371 and Rs 390, giving the company a valuation of up to $11.3 billion, a rise from $10.7 billion during its last funding round in 2022. In comparison, rival Zomato has a market capitalization of $26 billion.

Majety clarified that Swiggy’s IPO valuation is independent of Zomato’s and reflects its current scale and future growth strategies. The competition in the food delivery and quick commerce space is intense, with Zomato’s Blinkit and other players like Zepto, which recently raised over $1 billion, also vying for market share. Zomato aims to raise Rs 8,500 crore through a qualified institutional placement (QIP).

Based in Bengaluru, Swiggy has increased its fundraising target from Rs 3,750 crore to Rs 4,499 crore and will now offer 175.1 million shares for sale, down from the previously planned 185.3 million. Majety mentioned that the quick commerce market could reach a total addressable value of approximately $50-60 billion in the next four to five years. Besides the leading players—Blinkit, Zepto, and Instamart—quick commerce is also seeing entries from Flipkart with its Minutes service, Reliance JioMart, and Neu Flash from the Tata Group.

 

Swiggy IPO: Food Delivery Giant Sets Price Band Zomato, Swiggy’s competitor, is currently trading at a trailing price-to-earnings (P/E) ratio of 297x, while Swiggy’s ratio stands at -35.23x. Despite this, Swiggy’s IPO price range of Rs 371 to Rs 390 is higher than Zomato’s trading price of Rs 247 at the close of trading on October 30. An investment banker present at the IPO press conference noted that Swiggy’s valuation was determined by comparing these ratios with its listed peers and incorporating qualitative factors.

Swiggy’s pre-IPO earnings per share (EPS) is based on pre-issue shareholding and the latest earnings for the fiscal year ending March 31, 2024. Financially, Swiggy has managed to reduce its losses for FY24 to Rs 2,350.2 crore, down from Rs 4,179.3 crore the previous year, while revenue from operations rose by 36% to Rs 11,247.4 crore, compared to Rs 8,264.6 crore.

In the first quarter of FY25, Swiggy reported a loss of Rs 611 crore, which widened slightly from Rs 564 crore in the same quarter the previous year. However, quarterly revenue increased by 35% to Rs 3,222.2 crore. Swiggy intends to allocate the proceeds from the IPO as follows: Rs 1,343.5 crore for investments in its subsidiary, Scootsy; Rs 703.4 crore for enhancing technology and cloud infrastructure; and Rs 1,115.3 crore for brand marketing and business promotion.

Swiggy’s CFO Rahul Bothra explained that the larger budget for brand marketing is justified, as there is no immediate need for new capital expenditures for tech expenses, which are already covered by existing operating costs.

The IPO of India’s second-largest food delivery platform comprises a fresh equity issuance of Rs 4,499 crore along with an offer-for-sale (OFS) of 17.5 crore shares from existing shareholders, according to the Red Herring Prospectus (RHP). The fresh issuance was increased from the initially planned Rs 3,750 crore, while the OFS component was reduced from 18.5 crore shares as per the updated draft RHP filed on September 26.

 

Swiggy IPO: Food Delivery Giant Sets Price Band  On October 30, Swiggy (SWIG.NS), the Indian food delivery giant, announced a price range of 371 to 390 rupees per share for its $1.35 billion domestic initial public offering (IPO), as indicated in a newspaper advertisement published on Wednesday. This IPO is set to be the second-largest stock offering in India this year, following Hyundai India’s (HYUN.NS) $3.3 billion IPO earlier this month. (Exchange rate: $1 = 84.0660 Indian rupees)