Swiggy may file papers with Sebi for IPO in 2 weeks to raise Rs 8,000 cr

Swiggy is planning to file its draft red herring prospectus with the Securities and Exchange Board of India for its initial public offering (IPO) in the next two weeks, aiming for an $11 billion IPO valuation target.

The Bengaluru-based firm plans to raise an estimated $1 billion (Rs 8,300 crore) through the IPO this year. The company is targeting a valuation in the range of $10-11 billion, and it currently has approximately $800 million in cash from the previous funding round, according to sources.

The food delivery giant has been intensifying efforts to achieve profitability as it prepares for the IPO.

 

In 2022-23 (FY23), the company saw a 45 per cent increase in revenue, reaching Rs 8,625 crore. However, the net loss expanded to Rs 4,179 crore.

Swiggy’s largest expense in FY23 was purchases of stock in trade, rising by 48 per cent to Rs 3,302 crore. Employee benefits costs also climbed 25 per cent to Rs 2,130 crore.

Dineout, Swiggy’s restaurant technology platform acquired in 2022, contributed Rs 77.5 crore to revenue and incurred an operating loss of Rs 176 crore during the financial year.

Competitor Zomato reported a gross revenue jump of 68.9 per cent to Rs 7,079 crore in FY23, with losses declining to Rs 971 crore.

Amid plans for a domestic IPO, SoftBank-backed Swiggy is considering letting go of 350-400 employees, around 6 per cent of its workforce, to enhance efficiency and focus on profitability. The company employs around 6,000 staff members.

Invesco, a US-based fund manager, has marked up Swiggy’s valuation to $8.3 billion based on its 28,844 shares, representing around 2 per cent stake.

Swiggy had raised $700 million in Invesco-led funding in January 2022, becoming a decacorn with a valuation of $10.7 billion. However, due to challenges in India’s food delivery market, Invesco reduced the valuation to $5.5 billion in the following months before marking it up to $8.3 billion in October 2023.

Swiggy’s food delivery business grew 17 per cent in the first half of 2023-24, delivering a gross merchandise value of $1.43 billion.

The IPO market in India is expected to be active in 2024, with analysts predicting equity issuance to exceed $40 billion, driven by robust liquidity conditions and a favourable regulatory environment.

Approximately 40 startups or new-age firms are expected to go public or be ready for an IPO by 2024-25, focusing on profitability.

Swiggy declined to comment on its IPO plans.