Davos 2024: IPO preparations underway, says Swiggy's Sriharsha Majety

All kinds of preparations are on for Swiggy’s mega IPO, Sriharsha Majety, group chief executive officer (CEO) of the company told Moneycontrol on the sidelines of the World Economic Forum in Davos. The Bengaluru-based startup is gearing up for a mega IPO where it is likely to raise $1 billion later this year.

Moneycontrol had earlier reported that Swiggy is likely to have picked seven investment banks, including Kotak Mahindra Capital, Citi and JPMorgan, Bofa Securities, Jefferies, among others for its IPO processes.

“We’ve been preparing for our IPO. We’ve added independent directors to the board and there’s all kinds of preparations that are on,” Majety said.

In February last year, the food and grocery delivery platform had appointed Delhivery founder and CEO Sahil Barua, Chairman and Managing Director of TAFE Mallika Srinivasan, and Shailesh Haribhakti, Chairman of Shailesh Haribhakti & Associates to its board as independent directors.

More recently, in December 2023, it inducted FMCG veteran Anand Kripalu on its board as an independent director and also named him as the chairperson, in yet another sign that its IPO preparations are in full swing.

Swiggy is preparing for a public market listing after rival Zomato made its stock market debut in 2021. Majety said that Zomato’s listing has absolutely helped Swiggy in understanding more about retail investors and how they view the food delivery market.

“There is no denying that it (Zomato being listed) makes life easier for us. There’s much to learn in terms of how one manages communication as a public company, how one manages guidance as a public company, what gets more scrutiny and what doesn't,” Majety said in the interview.

Watch: Swiggy's Sriharsha Majety On IPO, Instamart & Zomato | Davos 2024

To better understand market dynamics, Majety speaks with the founders of other listed tech companies, including Zomato founder and group CEO, Deepinder Goyal.

“I have met Deepinder (Goyal) and have asked him what it is like to run a listed food delivery business. Not just him, I have met a bunch of tech founders who have taken their companies public,” Majety said.

Both Swiggy and Zomato have followed a similar path. In the past, both companies have admitted that their core business — food delivery – has slowed down faster than they had imagined. But like Zomato, even Swiggy believes its next phase of growth will come primarily from their quick-commerce divisions.

“Instamart’s contribution to overall revenue is increasing and it is the growth driver for the overall group. Food delivery continues to grow but at a slower clip than what it would have in the past because of increased penetration over the years,” Majety said.

Instamart, Swiggy's quick-commerce business, could still be larger than food delivery. The number of consumers who want grocery or allied items delivered will be larger than the number of consumers who want restaurant food delivered to their doorstep, Majety added. Zomato has echoed similar thoughts.

Swiggy’s Majety said his company has also been tapping newer streams and is now experimenting with generative AI (Gen AI) to improve operations but there is more to do.

“There's a lot more work that we're now doing on Gen AI. We've launched our in-house large language models (LLMs) that enable restaurants to manage their operations easily,” Majety said.