Exclusive: Swiggy offers 20% discount to HNIs in pre-IPO deal

Swiggy’s IPO is around the corner and the company has started preparing for their debut on the stock exchange, likely after the upcoming Lok Sabha elections. The firm turned into a public entity earlier this week and also shortlisted bankers to run the IPO syndicate.

While Entrackr exclusively reported about the firm’s conversion into a public entity and its financial numbers for the three quarters of FY24, wealth managers on Swiggy’s behalf have been pitching a pre-IPO deal to high net-worth individuals (HNIs) to buy its shares at a 20% discount on its current valuation, according to three sources aware of the details.

“The company is offering shares at Rs 350 a piece and at a valuation of Rs 80,000 crore ($9.6 billion). This is roughly a 20% discount,” said one of the sources requesting anonymity

Sources, however, add that the discount spectrum could be broader, and may very well exceed the 20% threshold.

According to sources, Swiggy’s current valuation stands at around Rs 1,00,000 lakh crore (over $12 billion). “The minimum investment in the round is Rs 25 lakh,” added the above-quoted person.

It’s worth highlighting that US-based investor Invesco recently marked up Swiggy’s valuation up to $12.7 billion, indicating an optimistic outlook for the food tech company. It’s worth noting that it was the second markup in its value by Invesco and overall third for the Bengaluru-based foodtech decacorn.

Queries sent to Swiggy did not elicit an immediate response.

Swiggy booked Rs 5,476 crore in revenue from operations and Rs 1,600 crore loss during the first three quarters of the financial year FY24. Its revenue and losses stood at Rs 8,265 crore and Rs 4,179 crore, respectively, in the fiscal year ending March 2023.

Meanwhile, rival Zomato’s revenue from operations stood at Rs 8,552 crore during the first three quarters of FY24. The firm, which made its public debut in 2021, also booked Rs 178 crore profit during the period. Currently, Zomato’s market cap hovers around $20.7 billion.

That being said, Swiggy is marching ahead with its IPO plans as market sentiments appear to turn increasingly bullish following a year of the so-called ‘funding winter’. This is evident from recent valuation markups of several startups, including Meesho, PineLabs, FirstCry, and Ola Electric which are gearing up to go public either this year or early next year.

While the sterling turnaround in peer Zomato’s numbers might give cause for optimism to Swiggy’s investment bankers, they will be aware that powering Zomato is the sharp rebound in the performance of Blinkit, its quick delivery platform. Swiggy’s Instamart by contrast, has been a laggard in the space. Lending further credence to the fact that profits on the IPO are hardly a given for investors is the matter of aggregate losses, unlike Zomato. It seems fairly certain that a successful IPO will be followed by at least a year or more of losses for Swiggy, or subdued growth, if it chooses to staunch losses. The $12 billion valuation in private markets, by that measure, seems too optimistic yet, perhaps a fairer indication of value in FY26, than in FY25, if at all. 

Update: April 10, 21:00PM IST: This article has been updated with fresh inputs from sources.