IPO News: Indian Food Deliver Startup, Swiggy to Get IPO Approval for $1.25 Billion

Swiggy has received consent from shareholders for an IPO of about $1.25 Billion. The Indian food delivery Start-up, Swiggy IPO plans to issue $450 million and offer $800 million of shares from existing investors in the IPO news (Initial Public Offering), according to a filing to the Ministry of Corporate Affairs.

Swiggy is backed by the following investors including Invesco, Accel, and SoftBank. Swiggy IPO price was previously valued at $ 10.7 billion during a funding round announced at the beginning of the year 2022. Investors including Baron and Invesco have since publicly declared Swiggy's valuation to be more than $ 12 billion.

According to Swiggy's filing, the company intends to "explore options for a fund raise through an IPO news (Initial Public Offering) and offering its shares to the market for subscription."

Swiggy's public listing strategy, IPO news aligns with a growing number of cutting-edge startups looking to go public this year, as risk capital inflows continue to accelerate across the industry.

Swiggy has a market share of 45.8% in the Indian market of food delivery and a gross merchandise equivalent (GMV) of $ 2.57 billion in 2023, according to a recent note from Bernstein analysts. The company has a wide network of delivery agents of approximately 3,75,000 and serves food to people of approximately 16-17 million monthly who order food through its app.

Zomato is the primary competitor of the food delivery start-up, Swiggy. The market capitalization of Zomato stood at $19.5 Billion in the Bombay Stock Exchange on Thursday. Zomato went public in 2021.

In the instant commerce space, Zomato owns Blinkit, which it acquired in mid-22 for a whopping price of $568 million and since then the commercial business of Swiggy has made a huge growth that is almost equivalent to the food delivery startup in terms of valuation.

Swiggy has a rivalry with Zepto and Zomato and competes with them in the food delivery business and instant commerce business and has made a huge diversification within a few years.

Previously, in 2023, Swiggy planned to go public with IPO news but later withdrew the plan because of unfavorable market conditions, as per the report suggested by TechCrunch

Dutch-listed has a 33% stake in Swiggy and can be considered one the biggest investors for the company. DST Global, Alpha Wave Global, Elevation Capital, Tencent, Qatar Investment Authority, Accel Partners, Norwest Venture Partners, Hillhouse Capital Group, Tencent, Coatue, and GIC are the different shareholders that invest in Swiggy.

In addition, the company has obtained the consent of its shareholders to raise the investment limit for FII, NRIs, and OCIs to 24% from 10% of the paid-up share capital.

Blinkit acquired Zomato and Swiggy's fast commerce business, Instamart is facing fiercely tough competition from Zepto. Zepto is on track to reach annual sales of $1.2 Billion.

As per the data suggested by Tracxn, the co-founders of Swiggy Sriharsha Majety and Nandan Reddy hold a stake of 4% and 1.6% in Swiggy

The Indian food delivery app functions in more than 600 cities and has made huge profits, as per the statements given in the past by the company.

Oyo was the first startup to file its draft IPO papers confidentially following which Swiggy followed the same path for filing its IPO papers.

Swiggy went through a loss of $207 million for almost 9 months to December 2023. The loss was due to the revenue in the same period comparing it to fiscal revenue of $1.05 billion in 2022-23, according to a previous report.

Swiggy is in the lookout to seek about ₹750 crore from anchor investors. Also, Swiggy is yet to submit its IPO filings to the Securities and Exchange Board of India (SEBI), as stated by a report.

The special resolution was passed on April 23 at Swiggy's extraordinary general meeting

In the financial year 2023, Swiggy saw a huge increase in its revenue from 45% to Rs 8,625 crore and the net loss increased to Rs 4,179 crore, as per the annual filings by Swiggy while Swiggy's Instamart had gained a revenue Rs 5,705 crore and went through a net loss of Rs 3,629 crore.

Moreover, on the other hand, in the financial year, 2023, the revenue of Zomato increased from 66% to Rs 7,761 crore while it went through a net loss of Rs 971 crore. Zomato has been making a profit for the last three quarters and, as of April 26, has a market capitalization of over $20 billion. The last valuation of Swiggy was S10.7 billion in January 2022.