Swiggy’s plan of raising Rs 10,000-crore via a qualified institutional placement (QIP) has been set in motion. On December 8, the shareholders of the food and quick-commerce major approved the proposal for one of the largest equity fundraises in India’s consumer internet space this year.
In a regulatory filing to the exchanges on December 8, Swiggy said the special resolution was passed at its extraordinary general meeting (EGM). A total of 76.40 percent of shareholders participated in the vote, with 99.47 percent of the votes cast in favour of the proposed equity issuance.
What happens next with the QIP?
The company expected to reach out to long-only funds and global institutional investors. To be sure, the QIP issue opens on a later date which remains undecided as of now. During that window, institutional investors will invest monies into the company.
Under the resolution, Swiggy is authorised to issue equity shares to eligible qualified institutional buyers for an amount not exceeding Rs 10,000 crore, giving it a significant war chest to fund expansion across food delivery, Instamart and newer business verticals.
Why is Swiggy raising money now?
The fundraise comes at a time when competition in the rapidly growing quick-commerce market is fierce and is expected to remain intense over the next few quarters. Swiggy Instamart and rivals Blinkit and Zepto are on an aggressive expansion spree for a bigger market share.
Blinkit recently raised Rs 600 crore to fuel its operations, taking the total funds raised this year to Rs 2,100 crore.
Zepto, too, recently raised $450 million in a funding round, underscoring the capital-heavy nature of the quick-commerce battle.
How will Swiggy use the proceeds?
The company has indicated that the fresh capital would be used to strengthen its balance sheet, fund growth opportunities and support investments across its platform.
Recently, Swiggy also monetised its stake in Rapido, bolstering liquidity ahead of the institutional share sale.
Investor response to the offer and pricing will be closely watched amid intensifying quick-commerce funding race.
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