Swiggy Gets Shareholder Nod for $1.25 Billion IPO, Gears Up for Public Listing

Swiggy, the leading Indian food and grocery delivery platform based in Bengaluru, has received a crucial green light from its shareholders for a much-anticipated initial public offering (IPO). This move paves the way for Swiggy to enter the public market and raise substantial capital for further growth.

Fresh Capital Infusion and Offer for Sale

As per regulatory filings with the Registrar of Companies, Swiggy aims to raise up to Rs 3,750 crore (approximately $450 million) in fresh capital through the IPO. Additionally, existing shareholders will have the opportunity to offload a portion of their holdings through an offer-for-sale (OFS) component valued at up to Rs 6,664 crore (approximately $800 million). This dual approach signifies Swiggy's strategy to secure fresh funds while allowing existing investors to potentially realize returns on their investments.

Pre-IPO Round and Upcoming Filings

While Swiggy has yet to formally file its IPO prospectus with the Securities and Exchange Board of India (SEBI), the company is reportedly seeking to raise Rs 750 crore (approximately $90 million) from anchor investors in a pre-IPO round. This pre-IPO funding could serve as a buffer and showcase investor confidence ahead of the public offering.

Swiggy Joins the IPO Rush

Swiggy's decision to go public aligns with a broader trend within the Indian startup ecosystem. Several new-age companies, including omnichannel retailer Firstcry, electric vehicle manufacturer Ola Electric, and co-working space provider Awfis, are also reportedly preparing for IPOs in 2024. This wave of public listings reflects growing investor interest in the potential of these innovative businesses.

Shareholding Structure and Internal Restructuring

Swiggy's shareholder base comprises prominent names like Dutch investment giant Prosus (holding the largest stake at 33%), SoftBank, Accel, Elevation Capital, and several others. The company's co-founders, Sriharsha Majety, Nandan Reddy, and Rahul Jaimini, also hold individual stakes. Notably, the recent extraordinary general meeting (EGM) of shareholders saw Majety and Reddy being appointed as executive directors. Majety will serve as the managing director and group CEO, while Reddy takes on the role of whole-time director and head of innovation. Jaimini, who exited his operational role in 2020, is no longer part of the active leadership team.

Swiggy's Financial Performance

For the financial year ending March 2023, Swiggy reported operating revenue of Rs 8,265 crore, a significant 45% increase compared to the previous fiscal year. However, the company also experienced a 15% year-on-year rise in its net loss, reaching Rs 4,179 crore. This highlights the ongoing challenge of balancing rapid growth with profitability, a common theme for many high-growth startups.

Investor Confidence and Valuation

Despite the net loss, Swiggy appears to be attracting positive investor sentiment. As reported by The Economic Times, major investor Invesco marked up Swiggy's valuation to $12.7 billion in January 2024, following a $700 million funding round. Another investor, Baron Capital, also reportedly increased Swiggy's fair value on its books to $12.1 billion recently. This continued investor confidence bodes well for Swiggy's upcoming IPO.

Swiggy's shareholder approval for the IPO marks a significant milestone for the company. With strategic capital infusion and a potential public listing on the horizon, Swiggy is poised for an exciting new chapter in its growth story. The company's performance in the public market will be closely watched by investors and industry observers alike.