Swiggy files red herring prospectus, IPO subscription to open on Nov 6

Swiggy IPO :  Swiggy , India's leing food delivery service, has filed a red herring prospectus (RHP) with Registrar of Companies (ROC) on 28 October. company's highly anticipated initial public offering ( IPO ) will open for subscription on 6 November, closing on 8 November.

Swiggy’s IPO comprises a fresh equity issuance worth Rs 4,499 crore and an offer-for-sale (OFS) of 17.5 crore shares by existing stakeholders. fresh issue size has been increased from Rs 3,750 crore, and OFS component has been trimmed from 18.5 crore shares, as stated in an updated draft RHP filed on 26 September.

Backed by global investors, including Prosus and SoftBank, Swiggy is expected to announce IPO price band shortly. According to media reports, top end of price band is likely set at Rs 390 per share. 

Swiggy aims to raise around $1.35 billion (approximately Rs 11,700 crore), targeting a valuation of nearly $11.3 billion, which would place it at less than half of Zomato ’s valuation, estimated at $26.7 billion at an exchange rate of Rs 84.07 per dollar.

anchor book for Swiggy's IPO, second-largest this year after Hyundai Motor India’s Rs 27,870 crore issue, will open on 5 November, just after Diwali.

Key shareholders participating in OFS include Accel India, Apoletto Asia, Alpha Wave Ventures, Coatue PE Asia, DST EuroAsia, Elevation Capital, Inspired Elite Investments, MIH India Food Holdings, Norwest Venture Partners, and Tencent Cloud Europe. MIH India Food Holdings, affiliated with Prosus, is Swiggy’s largest shareholder, holding 30.93 per cent, while SoftBank’s SVF II SONGBIRD (DE) LLC owns 7.75 per cent. Accel India and Tencent Cloud hold stakes of 4.71 per cent and 3.64 per cent, respectively. Founders Sriharsha Majety (Managing Director and Group CEO) and Lakshmi Nandan Reddy Obul (Whole-time Director - He of Innovation) retain stakes of 5.36 per cent and 1.75 per cent, respectively.

Swiggy has reserved 7.5 lakh shares for employees, while remaining IPO is allocated 75 per cent to Qualified Institutional Buyers, 15 per cent to non-institutional investors, and 10 per cent to retail investors.

From net proceeds of fresh issue, Rs 1,343.5 crore will be allocated to Swiggy’s subsidiary Scootsy, Rs 703.4 crore to technology and cloud infrastructure, and Rs 1,115.3 crore to brand marketing and business promotion, with balance designated for acquisitions and general corporate purposes.

Financially, Swiggy reduced its annual loss for FY24 to Rs 2,350.2 crore, down from Rs 4,179.3 crore previous year, with revenue climbing 36 per cent to Rs 11,247.4 crore from Rs 8,264.6 crore. However, for quarter ending June 2024, company reported a wider loss of Rs 611 crore compared to Rs 564 crore in same period previous year, though revenue surged by 35 per cent to Rs 3,222.2 crore.

Swiggy will finalise allotment of IPO shares by 11 November, with shares credited to investor accounts on 12 November. Tring on BSE and NSE will commence on 13 November.

issue’s merchant bankers are Kotak Mahindra Capital Company, Citigroup Global Markets India, Jefferies India, Avendus Capital, JP Morgan India, BofA Securities India, and ICICI Securities.