Swiggy, India’s popular food and grocery delivery platform, is making major moves as it prepares for its highly anticipated Initial Public Offering (IPO). The company has successfully raised ₹5,085 crore (around $600 million) from more than 75 anchor investors. This marks a key milestone ahead of the official IPO launch, set to happen soon. Here’s everything you need to know about Swiggy’s upcoming IPO, the investors backing it, and the company’s financial outlook.
What is Swiggy’s IPO All About?
Swiggy, founded in 2014 and based in Bengaluru, has been a dominant player in India’s online food delivery space, competing with rivals like Zomato. The company recently announced the details of its ₹11,327 crore IPO, which will be one of the biggest IPOs in India this year. It aims to go public with a valuation of ₹87,300 crore (approximately $11.3 billion), making it one of the largest IPOs in the Indian food-tech sector.
How Will the IPO Be Structured?
Swiggy’s IPO consists of two main components:
- Primary Issuance (Fresh Fund Raise): ₹4,499 crore
- Secondary Offering (Offer for Sale): ₹6,828 crore
The primary issuance involves new shares being sold by Swiggy to raise fresh capital, while the secondary offering is a sale of shares by existing shareholders.
What’s the Price Range?
Swiggy has set the price band for its shares between ₹371 and ₹390 per share. At this price, Swiggy is aiming to raise funds and generate institutional support, hoping for a strong market debut.
Who Are the Anchor Investors?
Ahead of its official IPO launch, Swiggy has already raised ₹5,085 crore from more than 75 anchor investors. These investors are typically large institutions that commit to buying a substantial portion of the IPO before it opens to the public. The anchor investors in Swiggy’s IPO include some major global and Indian financial giants, such as:
- BlackRock
- Fidelity
- SBI Mutual Fund
- ICICI Prudential
- HSBC
- BNP Paribas
These institutions, which represent the financial backbone of the IPO, bought shares at the price of ₹390 per share. The backing from such prestigious investors adds credibility and stability to Swiggy’s IPO, which is expected to generate more interest from retail and non-institutional investors as well.
Swiggy’s Financial Performance: Growth and Losses
Swiggy has shown impressive growth over the past year, reporting a 36% increase in revenue for FY24, which rose to ₹11,247 crore from ₹8,265 crore in FY23. This indicates that the company is expanding its market share and growing its customer base.
However, the company is still facing challenges in becoming profitable. In FY24, Swiggy narrowed its losses by 44%, bringing them down to ₹2,350 crore from the previous fiscal year. While Swiggy is still not profitable, these improvements signal a positive trend in its financial health.
What Will the IPO Funds Be Used For?
The money raised from Swiggy’s IPO will be used to fuel its future growth. Here’s how Swiggy plans to allocate the funds:
- Expansion of Dark Store Network: Swiggy plans to invest in expanding its dark store network. Dark stores are warehouses used for quick delivery of groceries and other goods, a key part of Swiggy’s quick-commerce business model.
- Technology Investments: Swiggy will also invest in enhancing its technology infrastructure to streamline operations and improve the user experience.
- Marketing and Brand Promotion: With a larger market share in mind, Swiggy will focus on strengthening its brand and promoting its services through various marketing channels.
- Potential Acquisitions: The funds could also be used for strategic acquisitions to expand Swiggy’s presence in the food-tech and delivery space.
Why Is This IPO So Important?
Swiggy’s IPO is seen as an important milestone for both the company and the food-tech industry in India. The company’s public listing will mark its entry into the highly competitive stock market, where it will be compared to its biggest rival, Zomato, which made its own public debut in 2021.
Swiggy is hoping that a successful IPO will help it close the gap with Zomato, which currently has a market valuation of ₹2.1 trillion (₹2.18 lakh crore). Swiggy’s IPO is expected to inject fresh capital into the company, supporting its aggressive growth strategies in the fast-moving food delivery sector.
What’s Next for Swiggy?
With the IPO launch expected in the coming days, Swiggy’s management will be closely watching the market’s response. The company hopes that the backing of prominent institutional investors will bring confidence to other investors. The funds raised will help Swiggy further solidify its position as one of India’s most valuable tech-driven companies.
For retail investors looking to get a piece of Swiggy’s growth story, the IPO represents an exciting opportunity, though the company’s financial challenges should be considered before making any investment decisions.
Key Takeaways:
- Swiggy is launching a ₹11,327 crore IPO to raise funds and expand its market position.
- Anchor investors have already committed ₹5,085 crore to the IPO.
- Swiggy’s revenue has grown by 36% but it still faces substantial losses.
- The funds from the IPO will be used for expansion, technology, and marketing.
- The IPO could make Swiggy a major competitor to Zomato, which currently leads in market valuation.
Conclusion
Swiggy’s upcoming IPO is shaping up to be a game-changer in the Indian food-tech industry. With strong institutional backing and significant plans for expansion, the company is set to strengthen its position in an increasingly competitive market. For investors, this could be an opportunity to invest in one of India’s most promising tech companies.
