Swiggy weighs $150M boost for up to $1.4B India IPO

Indian food delivery startup Swiggy is weighing increasing the fresh issue component of its initial public offering by $150 million, aiming to raise a total of up to $1.4 billion in what is shaping up to be one of the largest public listings in India this year.

The Bengaluru-headquartered startup will ask shareholders to approve raising up to 50 billion rupees ($600 million) through a fresh issue of shares, up from the previously planned $450 million, according to a 15-page notice for an extraordinary general meeting filed late last week.

Swiggy, valued at $10.7 billion in its last fundraise in early 2022, is considering keeping its plan for existing investors to offer about $800 million in shares, people familiar with the matter said. The startup is seeking about $15 billion valuation at the IPO, according to people familiar with the matter, who cautioned that terms may change in the coming weeks.

Swiggy, which filed for an IPO confidentially earlier this year, has scheduled an EGM for October 3 to obtain shareholder consent for its revised IPO plans, which include both the enlarged fresh issue and an offer for sale by existing shareholders. Indian news outlet Entrackr first reported about the EGM notice.

Swiggy, which counts Prosus Ventures, SoftBank and Accel among its backers, is among the leading food delivery and quick commerce startups in India. It posted a revenue of $1.4 billion in the financial year ending March this year. Its quick commerce service, Instamart, was clocking a GMV at an annual runrate of $1 billion at the time, according to the company’s annual report.

The startup faces stiff competition from publicly-listed Zomato, Tata-owned BigBasket and General Catalyst-backed Zepto. “We see quick commerce industry going through a phase of increased competition in the next 6-12 months,” Bank of America analysts wrote in a note late last month.

“Top 3 platforms are entering into each other’s turf. In last 6-12 months, we have seen the top 3 peers increase assortment, lease bigger dark stores and hence cater to higher demand (partly by moving part of e-com market to quick com). As users are not price sensitive and already have wider assortment options, it’s not easy even for these top 3 to gain traction in other’s stronghold.”

At $1.4 billion, Swiggy’s initial public offering will be among the largest public debuts in India this year. Bank of America analysts said last month that Indian firms are poised to raise about $11 billion via IPOs and FPOs in the second half of this year.