Swiggy, the Indian food delivery giant, is gearing up for its highly anticipated Initial Public Offering (IPO) expected to take place by the end of 2024. This IPO has been the subject of much attention, as it could be one of the largest tech listings in India this year. Here’s what investors need to know before Swiggy hits the market.
Swiggy IPO: Key Details and Market Expectations
1. IPO Size and Valuation
Swiggy aims to raise approximately $1.2 billion through its IPO, with the total issue size potentially reaching ₹10,400 crore. This includes ₹3,750 crore in fresh capital and an offer-for-sale (OFS) component of ₹6,664 crore by existing shareholders. The company is targeting a valuation between $11.5 billion and $15 billion, depending on market conditions and investor demand.
2. Financial Performance
Swiggy’s revenue has shown robust growth, increasing by 45% to ₹8,265 crore in FY23. However, the company is still grappling with profitability challenges, reporting a net loss of ₹4,179 crore, which widened by 15% compared to the previous year. These financials reflect the company’s aggressive expansion strategy but also highlight the hurdles in achieving sustainable profitability.
3. Use of IPO Proceeds
The fresh capital raised from the IPO is expected to be utilized for expanding Swiggy’s quick commerce business, enhancing its technology infrastructure, and potentially exploring new service offerings. The offer-for-sale portion will allow early investors and employees to partially liquidate their holdings, providing them with liquidity.
4. Shareholder Structure
Swiggy’s major shareholders include Prosus (33%), SoftBank, and other global investors like Tencent, Accel, and Invesco. The co-founders, including CEO Sriharsha Majety, hold a smaller share, reflecting the company’s significant external funding over the years. The shareholder dynamics post-IPO will be closely watched as it could influence Swiggy’s strategic decisions.
5. Market Competition
Swiggy operates in a fiercely competitive market dominated by key players like Zomato. With Zomato already listed and performing well in the stock market, Swiggy’s IPO will be compared against its rival, both in terms of valuation and post-IPO performance. Investors will need to consider how Swiggy plans to differentiate itself and sustain growth in this competitive landscape.
FAQ
- When is Swiggy’s IPO expected to take place? Swiggy’s IPO is expected to take place by the end of 2024, though the exact date is yet to be finalized.
- What is the expected valuation of Swiggy during its IPO? Swiggy is targeting a valuation between $11.5 billion and $15 billion.
- How much capital does Swiggy aim to raise through the IPO? Swiggy plans to raise around $1.2 billion, with ₹3,750 crore as fresh capital and ₹6,664 crore from an offer-for-sale.
- What are the key financial figures of Swiggy for FY23? Swiggy reported a revenue of ₹8,265 crore and a net loss of ₹4,179 crore for FY23.
- Who are the major shareholders in Swiggy? Major shareholders include Prosus, SoftBank, Tencent, Accel, and Invesco, with co-founders holding smaller stakes.
Disclaimer: This article is for informational purposes only and does not constitute financial advice. Always consult with a certified financial advisor before making investment decisions.