Swiggy IPO: High-Profile Investors Back Rs 3,750 Crore Public Offering Amid Intense Market Competition

Swiggy, one of India’s largest food delivery platforms, has officially filed its draft red herring prospectus (DRHP) with SEBI (Securities and Exchange Board of India) for its much-anticipated Initial Public Offering (IPO). The IPO will include a fresh issue of shares worth ₹3,750 crore, along with an Offer for Sale (OFS) of 18.53 crore shares. The OFS proceeds will go to the existing investors who are selling their stakes.

This IPO has been eagerly awaited by the market, as it follows several years of rapid growth in Swiggy’s business, which started in 2014. Currently, Swiggy partners with over 150,000 restaurants across India and operates in both the food delivery and quick commerce spaces, the latter through its Instamart service.

Tough Competition in Food Delivery and Quick Commerce

Swiggy’s main competitor in the food delivery space is Zomato, which has been performing strongly since its IPO in 2021. Instamart, Swiggy’s quick commerce arm, competes with Zomato’s Blinkit and Zepto in the grocery delivery market, along with other players like Amazon, Tata Group’s BigBasket, and Flipkart. The competition in quick commerce is intensifying as demand for fast grocery delivery grows in India.

Big Names Among Swiggy’s Investors

Swiggy has attracted high-profile investors ahead of its IPO. Reports suggest that notable personalities such as cricketers Rahul Dravid and Zaheer Khan, tennis player Rohan Bopanna, filmmaker Karan Johar, and actor-entrepreneur Ashish Chowdhry have purchased Swiggy shares in the unlisted market. Bollywood stars Amitabh Bachchan and Madhuri Dixit Nene also invested in earlier funding rounds, along with Innov8 founder Ritesh Malik.

Strong Global Backing and IPO Details

Swiggy has received strong backing from global venture capitalists, including SoftBank Vision Fund, Accel, and Prosus. The Bengaluru-based startup is reportedly targeting a valuation of $15 billion through the IPO, which would make it one of the largest IPOs in the Indian tech space. In its last funding round in 2022, Swiggy was valued at $10.7 billion.

Swiggy’s IPO comes at a time when its rival Zomato is riding high after its successful listing. Together, Swiggy and Zomato dominate over 90% of India’s food delivery market, which is projected to grow to ₹2 lakh crore by 2030.

With strong market demand and big-name investors involved, Swiggy’s IPO is poised to be a major event in India’s startup and food tech industries.

Update (October 27th, 2024)

Swiggy, the major Indian food delivery company, has reduced its IPO valuation again to $11.3 billion, which is 25% lower than its original target of $15 billion. This decision comes as market conditions are uncertain, and Hyundai India’s recent stock debut hasn’t met expectations, according to two sources on Sunday.

BlackRock and the Canada Pension Plan Investment Board (CPPIB) will invest in Swiggy’s $1.4 billion IPO, set to be India’s second-largest stock offering this year, the sources told Reuters.

Despite recent market concerns, India’s IPO market has been strong, with around 270 companies raising $12.57 billion so far this year—significantly higher than the $7.4 billion raised in all of 2023.

Update (30th October, 2024)

Swiggy Ltd has set a price range of Rs 371-390 per share for its upcoming IPO, which will be open for subscription from November 6 to November 8. The anchor investor portion opens on November 5. The basis of allotment and refunds will be processed on November 11, shares will be credited on November 12, and the company is set to list on stock exchanges on November 13.

The IPO includes a fresh issue of Rs 4,499 crore and an offer for sale (OFS) of 17.5 crore shares by current shareholders and promoters. At the highest price point, the OFS will be valued at Rs 6,828 crore, bringing the total IPO size to about Rs 11,327.43 crore. This will place Swiggy’s overall market capitalization at approximately Rs 87,299 crore.