Invesco raises IPO-bound Swiggy's valuation for second time in a row to $8.3 billion

The second increase in Swiggy's valuation was after Swiggy saw back-to–back valuation cuts.

Invesco, a US-based asset management company (AMC), has raised Swiggy's fair value for the second consecutive time, and valued the food tech major at $8.3 billion, regulatory filings as on October 31, 2023 showed.

The investor has a stake of around 2 percent in Swiggy, as per Tracxn, a private markets data provider, and its cost of acquisition was around $190.5 million, according to regulatory filings. The value of Invesco's 28,844 shares in Swiggy were totally worth $147.6 million at the end of October 2023, the filings further showed, which translates to a valuation of $8.3 billion.

This is the second consecutive time that Invesco has raised Swiggy’s valuation. In October last year, Invesco had marked up Swiggy’s valuation by 42 percent to $7.85 billion. The increase to $7.85 billion was, however, after Swiggy saw back-to-back valuation cuts.

In April last year, Invesco cut Swiggy’s valuation to $8 billion, down from $10.7 billion, as tech stocks around the world took a beating. Shortly after that, Invesco again marked down Swiggy’s valuation as companies and investors around the world admitted that the food delivery market was growing slower than they expected. As a result, Invesco said Swiggy's valuation was $5.5 billion. That was nearly half of the $10.7 billion valuation Swiggy commanded while raising money in January 2022, as reported in May last year.

Despite Invesco increasing Swiggy’s valuation by around 6 percent, the latest markup indicates that the food delivery firm is now worth less than its valuation of $10.7 billion in January 2022 when the Bengaluru-based company raised $700 million in a round led by the US-based AMC.

Swiggy declined to comment on the valuation mark up.

Investors typically consider public market valuations when evaluating private market companies, and Swiggy is no exception. The update on Swiggy's valuation, increased slightly to $8.3 billion, is from October 2023. During that time, even Zomato's shares were trading slightly lower than their current levels, suggesting the possibility of further improvement in the valuation of the Bengaluru-based company in the coming months.

Zomato, which is listed on the stock exchanges, has been improving its financial health which helped its market capitalisation top Rs 1 lakh crore recently, or over $12 billion. 

Other investors in Swiggy, such as US-based Baron Capital, have also adjusted the company's valuation in recent months. As of March 2023, Baron had reduced the fair value of Swiggy by nearly 40 percent, valuing it at $6.5 billion.

Baron Capital then marked up Swiggy’s fair value by over 30 percent effectively valuing it at $8.5 billion as of June 2023.

Swiggy food marketplace CEO Rohit Kapoor had earlier told Moneycontrol that the company was not bothered by the change in valuations. These developments come at a time when Swiggy is preparing for a mega IPO this year and plans to raise over $1 billion. It has likely to have picked seven investment bankers including Kotak Mahindra Capital, Citi and JP Morgan, Bofa Securities, Jefferies, among others.