Swiggy secures SEBI approval for $1.25 Billion IPO, paving the way for major expansion

Prominent Bengaluru-based quick-commerce company Swiggy has received approval from the Indian markets regulator for its proposed $1.25 billion public issue according to reports. The food and grocery delivery platform had filed draft papers for the Initial Public Offering (IPO) with the Securities and Exchange Board of India (SEBI) through the confidential filing route in April this year, Economic Times reported citing an anonymous source.

Swiggy will now need to file an updated draft red herring prospectus (UDRHP) with SEBI. A 21-day window will be provided for public feedback on the UDRHP before the IPO is launched.

The IPO is expected to raise Rs 3,750 crore ($450 million) in fresh capital, along with an offer-for-sale (OFS) component of up to Rs 6,664 crore ($800 million).

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Bankers indicated the IPO size could increase before its launch. Major investors, including Prosus Swiggy’s largest shareholder with a 33 per cent stake and SoftBank, are likely to sell part of their holdings through the Offer For Sale (OFS). Other key shareholders include Accel, Elevation Capital, Meituan, Tencent, Norwest Venture Partners, DST Global, Coatue, Invesco, and GIC.

Swiggy’s annual report and financial health

Moneycontrol, mentioning Swiggy’s annual report that it had accessed, had reported earlier this month that its revenue grew 36 per cent from Rs 8,265 crore in financial year 2023 to Rs 11,247 crore in FY24.

During the same period, its losses were down 44 per cent from Rs 4,179 crore to Rs 2,350 crore. The loss reduction was largely attributed to stronger control on expenses during the year.

While Swiggy’s core business grew 36 per cent, it still trailed Zomato during the financial year. Gurugram-based Zomato, in comparison, had a revenue of Rs 12,114 crore (vs Swiggy’s Rs 11,247 crore) and clocked a profit of Rs 351 crore (vs Swiggy’s loss of Rs 2,350 crore) in FY24.

Still, while Swiggy closed the gap with its listed rival Zomato on the food delivery front, its Instamart grocery delivery business continued to lag with Blinkit. Swiggy Instamart clocked a revenue of Rs 1,100 crore in FY24. In the same year, Blinkit’s Rs 2,301 crore in the same year.