Swiggy IPO: Food Delivery Giant Likely To File DRHP With SEBI For $1.4 Billion Issue This Week; Reports

Food and grocery delivery giant Swiggy is gearing up to file its Draft Red Herring Prospectus (DRHP) this weekend, according to reports from Moneycontrol. The company, which has established itself as a major player in India's food-tech industry, is now looking to take advantage of the booming stock market by launching one of the most highly anticipated IPOs of the year.

Reports suggest that Swiggy's confidential filing with the Securities and Exchange Board of India (SEBI) has almost been approved, setting the stage for its DRHP submission. Once this is finalized, Swiggy's top management will embark on investor roadshows across India, the United States, and Singapore.

Swiggy's IPO

Swiggy's IPO comes at a time when competition in the online food and grocery delivery space heats up. The company's Instamart service, which focuses on grocery delivery, faces competition from Zomato-owned Blinkit, Zepto, and Tata's BigBasket. Swiggy's management and investors are confident about the company's prospects, especially considering the projected growth of India's food delivery market, which is expected to expand to Rs 2 lakh crore by 2030. Swiggy and Zomato are together controlling over 90% of the food delivery sector in India currently.

Swiggy's IPO also follows the successful public listing of its rival, Zomato, which went public in 2021. With this move, Swiggy is positioning itself to capitalize on the momentum generated by other new-age economy IPOs, all benefiting from the strong bullish trend in the Indian stock market.

IPO Details

Initially, Swiggy was expected to raise Rs 3,750 crore (approximately $450 million) through a fresh issue of shares. However, recent developments have seen the company increase the size of its IPO to $1.4 billion, reflecting an upsizing of Rs 1,250 crore ($150 million).

The overall IPO will now consist of two components: Rs 5,000 crore ($600 million) through the fresh issue of shares, and offer-for-sale (OFS) worth Rs 6,664 crore ($800 million), where existing investors will sell part of their stake.

Swiggy's board is expected to approve this revised proposal at its extraordinary general meeting (EGM) scheduled for October 3. Notably, the OFS component is unlikely to change, as the primary adjustment pertains to the fresh issue of shares.

Swiggy's growth has attracted several high-profile investors over the years. The company counts Prosus (32%), SoftBank (8%), and Accel (6%) as some of its major stakeholders. Other prominent investors include Elevation Capital, DST Global, Norwest, Tencent, the Qatar Investment Authority (QIA), and Singapore's GIC.

Swiggy was last valued at $10.7 billion when it raised funds in January 2022. Since then, the company has seen increased interest in the secondary market, with shares trading at Rs 330-350 per share. During recent secondary transactions, the company was valued at $9-9.3 billion. However, bankers involved in the IPO process are optimistic that Swiggy could debut with a valuation between $10 billion and $13 billion.

Swiggy's upcoming IPO will take place amid strong investor enthusiasm for the company and its potential in India's rapidly expanding food-tech market. With its confidential filing almost complete and SEBI approval likely around the corner, the company is set to proceed.

In the coming weeks, Swiggy's management team will participate in investor roadshows across key financial hubs, including India, the US, and Singapore, to build momentum and generate interest for its public offering. The time gap between DRHP and Red Herring Prospectus (RHP) is expected to be shorter than usual.