IPO-Bound Swiggy Reaches SEBI, Files DRHP For INR 3,750 Cr Issue, Prosus To Sell 63.8% Of OFS

On Thursday (September 26), foodtech giant Swiggy filed its first updated draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (SEBI) for an INR 3,750 Cr ($450 Mn) IPO.

According to the DRHP, Swiggy’s public offering will include a new issuance of shares worth INR 3,750 crore and an offer for sale (OFS) component of 18.53 crore equity shares.

Taking into account the recent reported share purchases at roughly INR 350 per, the OFS component is estimated to be around INR 6,485 crore. As a result, the company’s IPO is expected to be worth roughly INR 10,000 crore ($1.2 billion).

Related: Hindustan Composites Buy Minor Stake in Swiggy, Shares Gain

Investors such as Accel, Coatue, Alpha Wave, Elevation, Norwest and Tencent will sell shares as part of the OFS component. While Accel India IV (Mauritius) Ltd will offload 1.05 Cr shares, Alpha Wave Ventures will dump 55.73 Lakh shares as part of the OFS component.

This comes days after reports surfaced that SEBI approved the DRHP filed by the foodtech major via confidential pre-filing route.

The business intends to use the fresh IPO proceeds for marketing and promotional expenses (INR 929.5 crore), technology and cloud infrastructure investments, inorganic development through acquisitions, and general corporate objectives.

A portion of the funds will also be used to fuel its “material subsidiary” Scootsy. The company has set aside INR 982.4 crore to establish Scootsy’s network of dark stores, as well as to pay leasing and licence fees for these hidden stores.

“Investment in our material subsidiary, Scootsy, for: (a) expansion of our dark store network for our quick commerce segment through setting up of dark stores; and (b) making lease/ licence payments for dark stores,” according to the DRHP.

Swiggy announced in its DRHP that Scootsy Logistics Private Ltd. will provide supply chain services to wholesalers and retailers, such as warehouse management, in-warehouse processing, and order fulfilment.

The book-running lead managers for the IPO include Kotak Mahindra Capital, JP Morgan India, BofA Securities, Citigroup Global, and Jefferies, among others.

After gaining SEBI permission, the business plans to issue its shares on the NSE and BSE.

According to the DRHP, Swiggy’s net losses increased by more than 7% to INR 605.7 Cr in the first quarter (Q1) of the fiscal year 2024-25 (FY25) from INR 562.8 Cr in the same time previous fiscal.

Meanwhile, revenue from operations increased by about 35% to INR 3,222.2 Cr in the June quarter of the current fiscal year, compared to INR 2,389.8 Cr in Q1 FY24.

The development comes five months after Swiggy submitted its DRHP with SEBI in April via the confidential pre-filing procedure for an IPO of INR 10,414.1 crore. According to rumors, the company gained regulatory approval for its IPO just days ago.

In the run-up to the IPO, the company secured investors from the family offices of actors Amitabh Bachchan, Madhuri Dixit, cricketers Rahul Dravid and Zaheer Khan, tennis player Rohan Bopanna, director Karan Johar, and actor Ashish Chowdhry.

Swiggy is the newest Indian startup to join the IPO bandwagon. Buoyed by good market sentiment and increased investor enthusiasm for new-age internet companies, as many as ten Indian startups have floated on bourses this year, including Go Digit General Insurance, FirstCry, Unicommerce, TBO Tek, Ola Electric, and Awfis, among others.