Swiggy IPO: Key Highlights, Investor Details, and What to Expect from India’s Food Delivery Giant’s Market Debut

Swiggy, one of India’s largest food delivery and quick commerce platforms, has officially launched its initial public offering (IPO), sparking substantial interest among retail and institutional investors alike. Scheduled from November 6 to November 8, 2024, this IPO marks a significant milestone for the company as it aims to raise over ₹11,327 crore through a combination of fresh shares and an offer-for-sale (OFS). The proceeds will be used to enhance the company’s operations, expand its infrastructure, and strengthen its technology backbone.

Here’s an In-depth look at Swiggy’s IPO, including subscription details, investment requirements, company financials, and what potential investors should consider.

1. IPO Subscription Status: A Modest Start

Swiggy’s IPO opened on November 6, attracting considerable attention but with a somewhat restrained response on its first day. By the close of trading, the IPO was subscribed to only 12% of the total offering. Notably, the retail Investor category showed promising interest, subscribing to 54% of its allotted shares. However, the Non-Institutional Investors (NIIs) segment saw a lower subscription rate of just 6%, while Qualified Institutional Buyers (QIBs) showed minimal activity.

As of the close on day one, Swiggy’s IPO had received bids for approximately 1.89 crore shares against a total of 16.01 crore available. This moderate start may be reflective of the IPO’s high valuation range and the cautious approach of certain investor segments.

2. Price Band and Minimum Investment Details

Swiggy’s IPO is priced within a band of ₹371 to ₹390 per share. For retail investors, the minimum application size is set at 38 shares, translating to a minimum investment of ₹14,820. In contrast, small and large NIIs can apply for 14 lots (532 shares) and 68 lots (2,584 shares), requiring investments of ₹2,07,480 and ₹10,07,760 respectively. This structure allows flexibility for investors across varying investment capacities.

3. Key IPO Dates and Allotment Process

The subscription window for Swiggy’s IPO remains open until November 8, with allotments expected to be finalized by November 11. For investors who do not receive shares, refunds will be initiated on November 12. Swiggy’s listing on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) is tentatively set for November 13, a significant date as it will mark Swiggy’s debut on the public markets.

4. IPO Structure and Objectives

The IPO consists of a fresh issuance of 11.54 crore shares, raising approximately ₹4,499 crore, alongside an OFS comprising 17.51 crore shares, amounting to ₹6,828 crore. The funds generated will be allocated strategically: a portion will be used to repay loans held by Scootsy, a Swiggy subsidiary, while additional funds will support the expansion of dark stores for Swiggy’s quick commerce division, Instamart. Moreover, part of the proceeds will be invested in enhancing Swiggy’s technology infrastructure, a critical move to streamline its operations and improve the customer experience.

5. Financial Performance Snapshot

Swiggy’s financials reveal a mixed performance, showing substantial revenue growth coupled with ongoing losses. The company reported revenue of ₹11,634 crore for FY24, a 33% increase from the previous fiscal year. Despite this growth, Swiggy posted a net loss of ₹2,350 crore in FY24, marking a notable reduction from its ₹4,179 crore loss in FY23. For Q1FY25, Swiggy reported revenue of ₹3,310 crore with a net loss of ₹611 crore.

Swiggy’s current net worth stands at ₹7,445 crore as of June 2024, down slightly from ₹7,791 crore at the close of FY24. Despite challenges in profitability, Swiggy has demonstrated a solid track record of revenue growth, reflecting strong demand for its services in food delivery and quick commerce.

6. The Role of Lead Managers and Registrars

Swiggy’s IPO is managed by a group of seasoned lead managers, including Kotak Mahindra Capital, Citigroup Global Markets India, Jefferies India, and ICICI Securities, among others. Link Intime India Private Ltd has been appointed as the registrar for the IPO, responsible for managing the allotment process and other administrative functions associated with the offering.

7. Swiggy’s Strategic Plans Post-IPO

A key objective of Swiggy’s IPO is to reinforce its quick commerce infrastructure, specifically through the expansion of Instamart’s dark store network. The company also aims to invest in technology upgrades and cloud infrastructure to enhance its logistics and delivery capabilities. Additionally, funds from the IPO will support Swiggy’s continued focus on refining its service offerings, with an eye on improving customer satisfaction and capturing a larger share of India’s burgeoning e-commerce market.

8. Understanding the Investment Risks and Opportunities

Investors considering Swiggy’s IPO should weigh both the growth potential and inherent risks. As one of India’s largest players in food delivery and quick commerce, Swiggy operates in a highly competitive market dominated by both domestic and global players. The company’s recent focus on profitability, combined with its ambitious expansion into quick commerce, underscores Swiggy’s commitment to building a sustainable business model.

However, investors should also note Swiggy’s ongoing financial losses, high operating costs, and the challenges posed by intense competition from players like Zomato and Dunzo. Swiggy’s success will likely hinge on its ability to scale effectively, streamline its operations, and achieve profitability in the near term.

9. About Swiggy: A Glance at the Company’s Journey and Operations

Founded in 2014, Swiggy has become a household name in India’s food delivery sector, quickly expanding its operations to include dining and quick commerce. The company now employs over 5,400 workers and maintains a robust logistics and distribution network that supports its services in food delivery, quick commerce, warehousing, and retail logistics. Swiggy’s innovation in delivery and logistics has contributed to its rapid growth, enabling it to cater to millions of customers across India.

Conclusion: Swiggy’s IPO – A Defining Moment for India’s Food Delivery Leader

Swiggy’s IPO has the potential to shape the future of food delivery and quick commerce in India. While its current subscription status reflects a cautious market response, the company’s strong revenue growth, aggressive expansion plans, and strategic investments in technology could drive long-term value for shareholders. Swiggy’s journey to profitability will undoubtedly face challenges, but its public listing represents a bold step forward in its mission to transform India’s food and quick commerce landscapes.

Investors eyeing Swiggy’s IPO should assess both the immediate market dynamics and the company’s potential for sustainable growth. As Swiggy steps into the public arena, its success could set the stage for more opportunities in India’s fast-evolving e-commerce sector.