Swiggy makes confidential filing for its $1.25 bn IPO
BENGALURU: Homegrown food aggregator Swiggy has submitted a draft red herring prospectus (DRHP) for an initial public offering with the Securities and Exchange Board of India (Sebi) via the confidential filing route, according to two people with knowledge of the matter.
The development comes after the company earlier this week secured shareholder approval for a potential $1.25 billion public offering, as per filings made with the Registrar of Companies.
The delivery giant aims to raise about $450 million in fresh capital and another $800 million through an offer for sale, as per the filing.
Investment bankers to the issue include Citi Group, Jefferies Group, Kotak Mahindra Capital, ICICI Securities, and Bank of America. Confidential filings are usually undertaken by a company to retain its competitive position in the market by keeping details of its business plans, risks, and other information private with the Sebi.
The document will be available to the public only after the markets regulator issues its observations. Under the normal route, the DRHP is available for everyone to see as soon as it is filed.
The company last raised about $700 million in January 2022 in a funding round at a $10.7 billion valuation led by US-based asset management company Invesco and Dutch investor Prosus Ventures. However, Invesco cut Swiggy’s valuation twice in 2023 before raising the company’s value to $8.3 billion again earlier this year.In FY23, the company’s operating revenues grew about 45% to ₹8,264 crore while its losses widened by 15% to ₹4,179 crore, as per its latest financials.
The company has been making rapid strides to become profitable by the second half of this year. It has been consistently trying to increase its platform fee to improve its margins. However, this is not specific to Swiggy. Other quick commerce and food delivery players like Zomato and Zepto have also teased this feature to improve margins to offset high costs.
Swiggy faces significant challenges in a slowing market, where increasingly price-conscious customers complicate growth. These difficulties are compounded in a fiercely competitive landscape, where other players are also striving to expand their user base, minimize cash burn, and achieve positive unit economics. Additionally, the company has also seen senior-level management exits in the past year. Founded in 2014 by Sriharsha Majety, Nandan Reddy and Rahul Jaimini, Swiggy delivers food and groceries and has so far, raised over $3.5 billion from several investors, including Prosus, SoftBank, GIC, and QIA.