All eyes are on Swiggy ahead of its big IPO. In a first major step towards going public, the food tech major filed its first updated draft red herring prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on Thursday, September 26. The DRHP filing indicates that the fresh issue component is for Rs 3,750 crore, while the offer for sale (OFS) would comprise 18.53 crore shares, Money Control reports.
Based on recent transactions at Rs 350 per share, the OFS component is expected to be around Rs 6,500 crore.
This IPO move is expected to boost Swiggy's capital, strengthening its presence in India's competitive food delivery space. Several early-stage investors, including Accel, Coatue, Alpha Wave, Elevation, Norwest, and Tencent, are set to reduce their stakes in the company as part of the OFS.
Investors bet on Swiggy's long-term growth
These investors are betting on Swiggy's long-term growth potential and are looking to diversify away from Zomato. This decision is expected to pave the way for new investors who are keen on capitalizing on the booming food delivery market in India. The Indian food delivery market, which is dominated by Swiggy and Zomato, is estimated to grow to Rs 2 lakh crore by 2030. Together, these two companies command over 90 percent of the food industry.
While Zomato has already gone public, Swiggy is set to join its rival in the coming months, further intensifying the competition. Swiggy's key investors include Prosus, which holds a 32 percent stake, SoftBank with 8 percent, and Accel with 6 percent. Other shareholders include Elevation Capital, DST Global, Norwest, Tencent, Qatar Investment Authority (QIA), and Singapore's GIC, among several others.
Swiggy's valuation and IPO expectations
Swiggy was valued at $10.7 billion when it last raised funds in January 2022. However, over the past months, bankers have expressed confidence that Swiggy can list with a market capitalisation/valuation of around $10-13 billion.
The preparation for Swiggy's IPO started back in November 2023, and it has been highly anticipated. Since April, Swiggy has seen increased action in the secondaries market.
