Swiggy Targets $12.7bn Valuation for $1.4bn IPO to be Launched Early November

Food delivery company Swiggy is targeting a valuation in the range of $11.7–12.7bn as it is set to launch an initial public offering (IPO) early next month, according to a report by Moneycontrol. 

"Swiggy is currently working with an IPO valuation in the range of $11.7 billion to $12.7 billion and bids have started coming in from anchor investors," said a source as cited in the report. 

Swiggy’s IPO has a fresh issue component of Rs 3,750 crore and an offer for sale (OFS) of up to 182,286,265 equity shares, according to the updated draft red herring prospectus-I. 

The primary component might be upsized to Rs 4,500 crore, and depending on valuations and investor exit strategies, changes are expected in the OFS component too, another source, cited in the report, said, adding that eventually the IPO size is expected to be at least Rs 12,000 crore or $1.42bn.

Also Read: Swiggy Gets Shareholders' Approval to Raise Fresh Issue Size to Rs 5,000 Crore

IPO Documents Filed Confidentially

Swiggy filed its IPO documents confidentially and received Securities and exchange board of India’s (Sebi) approval on September 24. Under Sebi’s new confidential filing route, introduced in November 2022, companies can withhold sensitive information until they finalise their IPO plans.

The company plans to allocate up to Rs 137 crore for investments in its material subsidiary Scootsy for repaying or pre-paying borrowings. For expanding its dark store network for quick commerce segment and making lease/license payments for these stores, an investment of Rs 982 crore in Scootsy is planned. Rs 586.20 crore will be allocated to technology and cloud infrastructure, and Rs 929.50 crore will be invested in brand marketing and business promotion across segments.

Key investors of Swiggy include Prosus holding a stake of 32 per cent, SoftBank (8 per cent) and Accel (6 per cent). Elevation Capital, DST Global, Norwest, Tencent, Qatar Investment Authority, Singapore’s GIC are among other shareholders in the company. 

The investment banks advising on the IPO are Citi, JP Morgan, Kotak Mahindra Capital, Jefferies, ICICI Securities, Avendus Capital and Bofa Securities with law firm Cyril Amarchand Mangaldas, the company counsel.

The document lists ten corporate selling shareholders, namely, Accel India IV (Mauritius), Apoletto Asia, Alpha Wave Ventures, Coatue PE Asia XI, DST EuroAsia V B.V., Elevation Capital V, Inspired Elite Investments, MIH India Food Holdings, Norwest Venture Partners VIIA-Mauritius and Tencent Cloud Europe B.V.

Lakshmi Nandan Reddy Obul, P.R. Venketrama Raja, Rahul Jaimini, Samina Hamied and Sriharsha Majety are the individual selling shareholders. 
 
The book-running lead managers for the IPO are Kotak Mahindra Capital Company, Citigroup Global Markets India Private Limited, Jefferies India Private Limited and Avendus Capital Private Limited, and Link Intime India Private Limited serves as the registrar to the issue. 

Since its incorporation in 2014, the company has incurred net losses each year. For FY24, Swiggy reported losses of Rs 2,350.24 crore, lowering from Rs 4,179.30 crore in FY23 and Rs 3,628.89 crore in FY22. Revenue from operations for the same period was Rs 11,247.39 crore, compared to Rs 8,264.59 crore and Rs 5,704.89 crore in the previous financial years.