Swiggy Ltd.'s initial public offering, structured as a book-built issue, is aimed at raising a total of Rs 11,327.4 crore. The IPO comprises a fresh issue of 11.54 crore shares valued at Rs 4,499 crore and an offer-for-sale of 17.51 crore shares amounting to Rs 6,828.4 crore.
The IPO subscription window is open from Nov. 6 to Nov. 8, 2024. The allotment is expected to be finalised by Nov. 11, and Swiggy is scheduled to list on both BSE and NSE on Nov. 13. However, the share allotment and listing dates are yet to be confirmed.
The price band for the IPO is set between Rs 371 and Rs 390 per share, with a minimum application size of 38 shares. This takes the minimum investment amount for retail investors to Rs 14,820. For non-institutional investors or NIIs, the minimum investment requirement is 14 lots (532 shares) at Rs 207,480. Big NIIs, also referred to bNIIs, will need to apply for at least 68 lots (2,584 shares), amounting to Rs 1,007,760.
Swiggy IPO Key Details
Issue opening date: Nov. 6
Issue closing date: Nov. 8
Issue price: Rs 371–390 per share
Fresh issue size: Rs 4,499 crore
OFS size: Rs 6,828 crore
Total issue size: Rs 11,327.4 crore
Market value at upper end of price band: Rs 87,299 crore
Lot size: 38 shares
Business
Founded in 2014, Swiggy offers an all-in-one app for food delivery, grocery shopping, and household essentials—all accessible through its extensive on-demand network.
Swiggy’s operations span four main areas:
Food delivery: Ordering and delivery of restaurant food.
Out-of-home consumption: Dining reservations and events.
Quick commerce: On-demand delivery of groceries and household goods through Instamart.
B2B supply chain and distribution: Logistics and warehousing solutions for wholesalers and retailers.
The company also experiments with innovations on its platform, with initiatives such as Swiggy Genie, Dineout, and more.
As of June 2024, Swiggy featured around 19,000 stock keeping units on Instamart and operated 557 dark stores across 32 cities. The same expanded to 605 stores across 43 cities by September. The company's total headcount stood at 5,401 employees as June 31.
Use Of Proceeds
Repayment of Scootsy borrowings: Rs 164.8 crore.
Expansion of dark store network: Rs 1,178.7 crore.
Investment in technology: Rs 703.4 crore.
Brand marketing and promotion: Rs 1,115.3 crore.
Debt repayment: Rs 137 crore.
Financial Performance
Swiggy's revenue in the quarter ended June 2024 stood at Rs 3,222.2 crore. In the fiscal ended Mar. 31, 2024, it reported a revenue of Rs 11,247 crore, up 36.1% from Rs 8,264.59 crore in fiscal 2023.
The company saw an improvement in losses, reducing from Rs 4,275.74 crore in fiscal 2023 to Rs 2,208.01 crore in fiscal 2024. Its loss in the June quarter of this fiscal stood at Rs 611 crore.
Swiggy's earnings were primarily driven by food delivery, which contributed Rs 1,729.63 crore or 53.7% of the total revenue in the June quarter. Quick commerce business followed with a mop-up of Rs 403.3 crore or 12.5% of the revenue, followed by out-of-home consumption segment which accounted for only Rs 46.7 crore or 1.4%.
Food delivery business clocked a positive contributing margin of 6.4% in the June quarter, while quick commerce showed a negative margin of (−)3.18%, reflecting ongoing losses. Adjusted Ebitda in the first quarter was positive for food delivery at Rs 57.84 crore but remained negative for quick commerce, and out-of-home consumption.
Zomato Vs. Swiggy
In the April-June period, Zomato outperformed Swiggy in both revenue and profitability metrics.
Zomato reported revenue of Rs 4,206 crore, compared to Swiggy’s Rs. 3,222.2 crore, and achieved a positive Ebitda of Rs 177 crore, whereas Swiggy reported an Ebitda loss of Rs 544 crore.
Zomato also posted a net profit of Rs 253 crore in the June quarter, while Swiggy incurred a loss of Rs 611 crore.
In fiscal 2024 as well, Zomato held an edge at Rs 12,114 crore in revenue versus Swiggy’s Rs 11,247.3 crore. The company reported a net profit of Rs 351 crore against Swiggy's larger loss of Rs 2,350.2 crore.
In terms of valuation, Zomato’s market capitalisation stands significantly higher at Rs 2,24,393 crore compared to Swiggy's Rs 87,299 crore, reflecting a market value-to-sales ratio of 11.1x for Zomato versus 5.6x for Swiggy.
Swiggy IPO: Key Risks
Swiggy’s path to minimising losses hinges on driving revenue growth while carefully controlling expenses and cash flow.
The company is yet to turn Ebitda positive.
It also faces competition from its peer Zomato.
Sustaining financial stability depends on effectively retaining and acquiring cost-efficient users.
Smooth operations require attracting and retaining delivery partners to maintain a reliable logistics network.
Retaining current restaurant, merchant, and brand partners, as well as onboarding new ones, is crucial for ongoing business growth.
Passing on higher operational costs to customers could potentially impact order volumes.
Efficiently managing dark stores is essential for the success of Swiggy’s quick commerce segment.
Swiggy GMP
Swiggy IPO's grey market premium dipped to Rs 12, as of 10:25 p.m. on Nov. 5, as per InvestorGain. Going by this, the estimated listing price for the restaurant aggregator is Rs 402, marking as premium of 3.08% from the upper price band of Rs 390.
Investors should keep in mind that GMP is speculative upside seen in the unregulated grey market, and is not backed by exchanges.
Disclaimer: Investments in initial public offerings are subject to market risks. Please consult with financial advisors and read red herring prospectus thoroughly before placing bids.
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