As Swiggy prepares for a big IPO with its updated documents, investors will closely watch the huge 2 lakh-crore food delivery market.
Swiggy has filed its Draft Red Herring Prospectus (DRHP) to prepare for an initial public offering (IPO), marking a big move to join its competitor Zomato in the stock market. The IPO will include a new issue worth Rs 3,750 crore and an offer for sale (OFS) likely exceeding Rs 6,500 crore, making the total size of the IPO more than Rs 10,000 crore. Investors looking to diversify from Zomato will be watching this listing closely.
Founded in 2014 by Sriharsha Majety, Nandan Reddy, and Rahul Jaimini, Swiggy started as a food delivery service but has since grown into a tech-driven platform offering a range of hyperlocal delivery options. It has partnered with over 150,000 restaurants across India, establishing a strong presence in major cities and smaller towns.
Swiggy’s growth has been fueled by new ventures like grocery delivery through Instamart, which competes with BigBasket, and quick commerce. Competition has increased, especially with Walmart entering the rapid delivery market through Flipkart. However, Swiggy’s expansion aligns with the industry’s trend towards integrated, convenient services beyond just food delivery.
Swiggy’s financial performance highlights the challenges it faces in becoming profitable. In FY24, Swiggy saw a 36% increase in revenue, reaching Rs 11,247 crore, but it still reported losses of Rs 2,350 crore, although this was an improvement from Rs 4,179 crore in FY23. The reduction in losses was due to the company’s efforts to cut costs and boost margins before its IPO. However, the most recent quarterly loss widened compared to the previous year.
On the other hand, Zomato turned a profit in FY24, earning Rs 351 crore on revenues of Rs 12,114 crore. Zomato’s successful IPO in 2021 and its expansion into quick commerce through the Blinkit acquisition have helped it grow into a company valued at over $20 billion.
Swiggy has attracted not only major venture capital firms but also well-known celebrity investors. Several Bollywood stars and sports figures have bought stakes in the company in the unlisted market ahead of its IPO.
Notable investors include Bollywood actors Amitabh Bachchan, Madhuri Dixit, and filmmaker Karan Johar. Cricketers Rahul Dravid and Zaheer Khan, tennis player Rohan Bopanna, and Innov8 founder Ritesh Malik have also invested in Swiggy’s pre-IPO shares.
Additionally, global investors like SoftBank Vision Fund, Prosus, Accel, and Elevation Capital hold significant stakes in the company. Raamdeo Agrawal, chairman of Motilal Oswal Financial Services, is also a key shareholder.
Swiggy IPO Valuation
Swiggy plans to raise funds for future growth while providing an exit option for early investors through the offer for sale (OFS). The company was last valued at $10.7 billion in 2022 and is expected to aim for a valuation between $10 billion and $13 billion when it goes public.
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