Food delivery and quick commerce company Swiggy to raise Rs 5,000 Cr via fresh issue

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

Swiggy’s board has approved 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, according to an internal document that media was able to view.

Since the company filed draft documents in April with confidentiality, Swiggy’s initial public offering (IPO) has been expected. According to reports, the company has also obtained shareholder approval for a total funding raise of Rs 10,400 crore, comprising of Rs 6,664 crore through an OFS and Rs 3,750 crore through a fresh issue.

But, given that the new issue referenced in the most recent resolution is 1.3X larger than the previously estimated Rs 3,750 crore, Swiggy’s IPO size may differ. It is anticipated that the Bengaluru-based company will shortly submit its draft red herring prospectus (DRHP) to SEBI.

Hindustan Composites and Amitabh Bachchan’s Family Office made strategic investments in Swiggy prior to its initial public offering (IPO). Investor Baron Capital recently estimated Swiggy’s worth at $14.5 billion.

The food tech company showed impressive financial growth in FY24, increasing revenue by 36% year over year to Rs 11,247 crore and reducing losses by 44% to Rs 2,350 crore during that same period. While Swiggy’s quick commerce division, Instamart, brought in Rs 1,100 crore in gross revenue in FY24, the food division contributed Rs 6,100 crore to the company’s overall revenue.

In December 2021, Swiggy invested $700 million in quick commerce to compete with rivals like Zepto and Zomato’s Blinkit. The company led by Sriharha Majety also hired a new chief operating officer and chief executive for Instamart last month.

Bengaluru is catching up in 2024 after a string of startup IPOs from Delhi NCR. Digit Insurance and Ola Electric are two city-based businesses that have already debuted on a stock exchange this year. In addition to Swiggy, Ather Energy, based in Bengaluru, also filed its draft IPO documents on Monday. Hero MotoCorp, the company’s largest stakeholder, chose not to take part in the OFS.