Swiggy Set to Launch IPO: Key Dates and Details Unveiled

Swiggy, India's popular online food delivery service, will open its Initial Public Offering (IPO) for subscription on Wednesday, November 6, and will close on Friday, November 8. Anchor investors will be allocated shares on Tuesday, November 5. The price range for the IPO will be revealed on Wednesday, October 30.

Allotment and Listing Timeline

The IPO allotment is expected to be completed by Monday, November 11. Refunds and shares credited to successful applicants' demat accounts will take place on Tuesday, November 12. Swiggy's shares are projected to be listed on the Bombay Stock Exchange (BSE) and National Stock Exchange (NSE) on Wednesday, November 13.

IPO Size and Components

Swiggy’s IPO will include a fresh issue of shares worth Rs. 4,499 crore and an offer-for-sale (OFS) consisting of 175,087,863 equity shares from its existing shareholders. The OFS shareholders include major investors like Accel India IV (Mauritius) Ltd, Apoletto Asia Ltd, Alpha Wave Ventures, and others.

IPO Objectives

The funds raised from this IPO will be directed toward several key initiatives:

• Investing in Swiggy's subsidiary Scootsy.
• Expanding its Quick Commerce operations by setting up Dark Stores.
• Covering lease payments for these new facilities.
• Enhancing technology and cloud infrastructure.
• Supporting brand marketing and promotional efforts.
• Funding potential acquisitions to promote inorganic growth and cover other general corporate expenses.

Swiggy’s Business Model

Swiggy’s platform offers multiple services, from food delivery to groceries and household products through Instamart. Additional features include Dineout for restaurant reservations, SteppinOut for events, Genie for pick-up/drop-off services, and Swiggy Minis for other hyperlocal activities.

Key Financial Highlights

Swiggy reported a 34% increase in revenue and a 44% growth in profit after tax (PAT) from the fiscal year ending March 2023 to March 2024.

Key Risks for Investors

Swiggy has reported consistent losses since its inception, with negative operating cash flows. Major risks include:

User Base Retention

Challenges in retaining or expanding its user base cost-effectively could impact the company’s growth and financial performance.

Ongoing Losses

The inability to generate sufficient revenue growth while managing costs could result in continued financial losses.

Lock-in Period for Anchor Investors

For anchor investors, half of the allotted shares will have a 90-day lock-in period, while the remaining half will be locked in for 30 days post-allotment. Swiggy's IPO is anticipated to be the second-largest in India this year, following Hyundai Motor India’s IPO worth $3.3 billion earlier in the month.

Also read: Nationwide Retail Sales on Dhanteras Estimated at Rs. 60,000 Crore

Summary

Swiggy, an online food delivery service in India, is launching its Initial Public Offering (IPO) from November 6 to November 8. The price range for the shares will be announced on October 30, and anchor investors will get their shares on November 5. The shares will be listed on the Bombay Stock Exchange and National Stock Exchange on November 13.

The IPO will consist of a fresh issue of shares worth Rs. 4,499 crore and additional shares from existing investors. The funds will be used to invest in Swiggy's subsidiary Scootsy, expand its delivery network, improve technology, and support marketing efforts.

Swiggy has seen a 34% increase in revenue and a 44% rise in profit in the last year. However, it has reported losses since it started, and risks include keeping customers and managing costs. For anchor investors, there will be a 90-day lock-in period for half of the shares and a 30-day lock-in for the other half. This IPO is expected to be the second-largest in India this year.