Swiggy's IPO Receives Sebi Approval, Share Sale Expected in November

India IPO

Updated Sep 24, 2024

Swiggy’s IPO is likely to feature both an offer-for-sale (OFS) and the issuance of new shares, with the company targeting a valuation of approximately $15 billion.

Swiggy's IPO Receives Sebi Approval, Share Sale Expected in November

Swiggy's confidential IPO filing has received approval from the Securities and Exchange Board of India (Sebi), paving the way for a public listing expected in November, according to sources familiar with the matter.

Following this approval, Swiggy must submit an updated draft red herring prospectus (DRHP) before commencing its roadshows for the share sale, according to one of the sources, who requested anonymity. Earlier reports indicated that the food and grocery delivery platform's highly anticipated IPO could open in November, though Swiggy has not responded to queries regarding the timeline.

This IPO comes nearly three years after its competitor Zomato, also backed by SoftBank, went public. Zomato’s stock has surged, currently trading at nearly four times its ₹76 issue price. Swiggy’s offering will likely include both an offer-for-sale (OFS) and fresh share issuance, with the company aiming for a $15 billion valuation, though the final figure will be determined during the roadshows.

Regarding the share sale, Prosus Ventures, Norwest Venture Partners, and Goldman Sachs may offload some of their holdings in the $1.25 billion IPO, while SoftBank is expected to retain its stake, as it did in recent IPOs of companies like Ola Electric and Firstcry.

Norwest and Prosus have been early investors in Swiggy, while Goldman Sachs joined in 2021, valuing the company at $5 billion, with SoftBank investing a year later.

Swiggy reduced its FY24 losses by 43% to ₹2,350 crore, as food delivery and quick commerce segments grew. Operational revenue rose 36% to ₹11,247 crore, while gross order value (GOV) across its food delivery, Instamart, and dining businesses hit ₹35,000 crore, with 14.3 million monthly transacting users.

Instamart, Swiggy’s quick commerce arm, generated ₹1,100 crore in FY24, while competitor Blinkit posted ₹2,301 crore. Swiggy's Instamart GOV was ₹8,100 crore for the year, compared to Blinkit’s ₹12,469 crore.

Swiggy plans to use much of the IPO proceeds to expand Instamart, aiming to compete with Blinkit, Zepto, and BigBasket.