IPO Update: Swiggy, Food Delivery Giant, Eyes $800 Million IPO Early Next Year

Swiggy, an Indian food delivery service sponsored by SoftBank Group, has begun planning an IPO to raise at least $800 million early next year. Despite the fact that its competitor Zomato had a bad start in the market, the company has made the move.

The company, which is financed by SoftBank Group, has started adding independent directors to its board of directors because it wants to present itself as a logistics firm, according to insiders.

Zomato has a market capitalization of $9 billion dollars (Rs 67,600 crore). Prior to its IPO, Zomato was valued at $5.4 billion. In the third quarter, it recorded sluggish order value growth. Swiggy recently become a decacorn after raising $700 million in a funding round led by Invesco, doubling its valuation to $10.7 billion and surpassing its competitor Zomato.

Swiggy is also proposing a $700 million investment in Instamart, which has recently expanded to 19 cities.

Swiggy’s income fell by 23% year on year to Rs 2,145 crore in the previous financial year. However, regulatory data accessed by business intelligence platform Tofler revealed that its net loss fell 65 percent year on year to Rs 1,314 crore, according to the newspaper.

The company’s decision to go public, on the other hand, comes at a vital time for the Indian startup sector. Many businesses, such as Paytm, Zomato, PolicyBazaar, and Nykaa, who made a splash in the market recently are now struggling as their valuation has fallen to record lows.

Swiggy has entered the extremely competitive area of quick commerce delivery, where it faces competition from Dunzo, financed by Reliance Industries, BigBasket, and Zepto, backed by Y Cominator.

Swiggy is portraying itself as a logistics business, not only a food delivery player, for the reason of premium valuations, according to the article, which cited one of the sources.

The IPO preparations come as India’s benchmark stock index is drifting lower following a sharp rise in 2021, owing to signs of future Fed rate hikes, a slowing global economic recovery, and geopolitical uncertainties. Since mid-October, the index has down 6.5 percent, and foreign investors have been net sellers of Indian stocks since then.

In the financial year 2020-21, the food behemoth recorded a revenue decrease of 23% year on year to Rs 2,145 crore (FY21). However, regulatory data accessed by business intelligence platform Tofler revealed that its net loss fell 65 percent year on year to Rs 1,314 crore. Total expenses for the Bengaluru-based firm totaled Rs 3,310 crore.