India: Swiggy revives IPO plans for 2024 stock market listing

After a hiatus due to market challenges, Swiggy, the Indian food delivery company backed by Softbank, is targeting IPO plans for stock market listing in 2024. Sources familiar with the matter revealed to Reuters news agency that Swiggy has reinitiated discussions with bankers to evaluate its valuation. The previous funding round in 2022 valued Swiggy at $10.7 billion. However, the company, like numerous other Indian startups, had to shelve its initial public offering (IPO) aspirations due to market uncertainties and concerns over high valuations. The market rebound, both globally and in India, has spurred Swiggy to recommence its IPO preparations.

Valuation considerations

To steer its IPO plans, Swiggy has reached out to eight investment banks for proposals in early September. Notable names in the mix include Morgan Stanley, JP Morgan, and Bank of America, Reuters said quoting sources.

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While Swiggy intends to use its prior valuation of $10.7 billion from the latest funding round as a reference point, the company has yet to finalise the extent of the stake sale and ultimate valuation, the sources added.

In contrast, Invesco, a minor shareholder in Swiggy, valued the company at approximately $5.5 billion in May. Swiggy had initially mulled over raising $800 million to $1 billion through its IPO, based on insider sources.

Tentative timeline

The sources indicate that Swiggy is aiming to complete its IPO listing between July and September 2024, a window following India's national elections slated for May.Swiggy disclosed that its core food delivery segment achieved profitability in May, a significant milestone nine years after its inception. However, the newer grocery delivery arm, Instamart, continues to face losses.

Notably, Swiggy's competitor, Zomato, has witnessed a 54.8 percent surge in its shares this year, signaling a return of investor trust in India's financial markets.

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In a recent development, Indian grocery startup Zepto managed to secure $200 million in fresh funding, propelling its valuation to $1.4 billion, and becoming a unicorn.

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This achievement makes Zepto the first Indian startup to reach the billion-dollar valuation mark in nearly a year.

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