Exclusive: Swiggy to raise Rs 5,000 Cr via fresh issue

Swiggy, the food delivery and quick commerce firm, is set to raise Rs 5,000 crore ($602 million) in a fresh issue as part of its initial public offering (IPO). The Prosus-funded company has already targeted Rs 6,664 crore through an offer for sale (OFS), with plans to seek board approval for the OFS in the first week of next month.

According to an internal document accessed by Entrackr, Swiggy’s board has passed a special resolution to issue equity shares worth up to Rs 5,000 crore, subject to shareholder approval at a meeting (EGM) on October 3.

Swiggy’s IPO has been anticipated since the company filed draft papers confidentially in April. Reports suggest the firm has also received shareholder approval to raise Rs 10,400 crore in total (Rs 3,750 crore via a fresh issue and Rs 6,664 crore through an OFS).

However, Swiggy's IPO size may vary, as the fresh issue mentioned in the latest resolution is 1.3X larger than the previously estimated Rs 3,750 crore. The Bengaluru-based company is expected to file its draft red herring prospectus (DRHP) with SEBI soon.

Queries sent to Swiggy did not elicit a response by the time of publication.

Ahead of the IPO, Swiggy secured strategic investments from Amitabh Bachchan’s Family Office and Hindustan Composites. Meanwhile, investor Baron Capital recently valued Swiggy at $14.5 billion.

The food tech firm demonstrated strong financial growth with 36% year-on-year growth in revenue to Rs 11,247 crore in FY24 and cut its losses by 44% to Rs 2,350 crore in the same period. Swiggy’s food business contributed Rs 6,100 crore to its overall income, while its quick commerce arm, Instamart, generated Rs 1,100 crore in gross revenue in FY24.

To compete with rivals like Zepto and Zomato’s Blinkit, Swiggy invested $700 million in quick commerce in December 2021. Last month, the Sriharha Majety-led firm also roped in a new chief executive and new chief operating officer for Instamart.

Following a series of startup IPOs from Delhi NCR, Bengaluru is catching up in 2024. A few city-based companies, including Digit Insurance and Ola Electric, have already made their stock exchange debuts this year. Besides Swiggy, Bengaluru-based Ather Energy also submitted its draft IPO papers on Monday, with its largest stakeholder, Hero MotoCorp, opting not to participate in the OFS.