In January, Swiggy raised $700 million at a valuation of $10.7 billion, doubling its valuation in six months.
Food delivery company Swiggy, which is backed by South African internet giant Naspers and Japan’s Softbank, has kick-started preparations to launch a mega domestic initial public offer to raise around $1 billion and has engaged two investment bankers for the proposed listing as it looks to join rival Zomato in the listed universe, sources in the know told Moneycontrol.
Zomato made a spectacular debut on the bourses in July 2021 but its stock price has plunged in recent times, a trend seen in other new-age tech stocks as well.
“Investment banks ICICI Securities and JP Morgan have been taken on board by Swiggy as of now. More banks may be added later. This will be a big IPO and based on valuations, the firm may look at potentially raising in excess of a billion dollars,” said one of the people cited above.
Two other persons confirmed the development. One of them added that Swiggy planned to file the DRHP (draft red herring prospectus) with Sebi by June and a launch could happen in 2022 or early 2023 depending on market conditions.
According to the third person, Swiggy’s cost structure, traction around its new business initiatives (beyond the core food delivery segment) like quick grocery service Instamart and strong domestic focus are factors that bode well for its listing plans.
He said that the IPO was likely to be a combination of primary and secondary issuance of shares which would facilitate growth capital and a partial exit for the firm’s long list of investors.
All the three persons cited above spoke to Moneycontrol on condition of anonymity.
Moneycontrol could not elicit an immediate comment from Swiggy and will update this article as soon as we hear from the firm. ICICI Securities declined to comment and Moneycontrol is awaiting an email response from JP Morgan.
SWIGGY: THE VALUATION STORY
In January, Swiggy raised $700 million at a valuation of $10.7 billion, doubling its valuation in six months. The $700-million round was led by Invesco, with participation from new investors such as Baron Capital Group, Sumeru Venture, IIFL AMC Late Stage Tech Fund, Kotak, Axis Growth Avenues AIF- I, Sixteenth Street Capital, Ghisallo, Smile Group and Segantii Capital, the company said in a release.
Existing investors Alpha Wave Global (formerly Falcon Edge Capital), Qatar Investment Authority, and ARK Impact, along with its long-term investor Prosus, also participated in the round.
While rival Zomato is focused on its core food-related businesses—from food delivery, dining out to supplies for restaurants—and has taken an investment route to categories such as grocery, Swiggy has chosen to build out its on-demand businesses such as Instamart and Genie, a pick-up and drop service, alongside its core food delivery business.
Non-food categories now account for over a fourth of Swiggy's business volumes, with the number set to grow as it is used at a higher frequency.
Also Read: Swiggy raises $700 million at $10.7 billion valuation as rival Zomato sees intense selloff
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