Swiggy IPO to Open on November 6 with ₹11,327 Crore Offer at ₹371-₹390 Price Band Amid Market Caution
BILKULONLINE
Ahmedabad, Oct 31: Swiggy is one of India’s leading food delivery and convenience platforms, known for its extensive reach, efficient logistics network, and customer-first approach.
Launched in 2014 by Sriharsha Majety, Nandan Reddy, and Rahul Jaimini, Swiggy revolutionized the food delivery industry in India by focusing on hyperlocal delivery and developing an intuitive app that brings convenience directly to users’ doorsteps.
Swiggy, India’s prominent food delivery and convenience platform, is all set to debut on the stock market, opening its Initial Public Offering (IPO) for subscription on November 6, 2024.
Sriharsha Majety MD & Group CEO Swiggy limited, Abhishek Agarwal VP- Investor Relations- Swiggy ltd and Gautam Benjamin of ICICI Securities ltd were in Ahmedabad on Wednesday to announce the details about Swiggy IPO with the media persons.
Providing the details Sriharsha said “Swiggy’s Initial Public Offering (IPO) will be available for subscription from November 6 to November 8, 2024. The company is looking to raise ₹11,327.43 crore, with a price band for shares set between ₹371 and ₹390, and shares available in lots of 38. Swiggy’s valuation for this IPO has been set at $11.3 billion, a decrease from an earlier target of around $15 billion, reflecting investor caution amidst market volatility. This offering comprises a fresh issue of equity worth ₹4,499 crore and an offer-for-sale (OFS) component of approximately 17.5 crore shares from existing shareholders”.
Abhishek Agarwal explained that “Swiggy shares currently trade at a grey market premium of ₹22-25, indicating potential listing gains of around 6.41% and suggesting a likely listing price of about ₹415. Proceeds from the IPO will be used to invest in Swiggy’s material subsidiary, Scootsy, for debt repayment, and to expand its dark store network in the quick commerce sector. Additional funds will support technological advancements, brand promotion, and potential future acquisitions”.
Prominent firms like Kotak Mahindra Capital, Citigroup Global Markets India, and Jefferies India are among the lead managers of the IPO, with Link Intime India Private Ltd serving as the registrar.
Business Model and Growth Strategy
Swiggy operates on a hyperlocal model, focusing on delivering food, groceries, and other essentials within minutes. Its primary revenue sources are:
- Commissions from partner restaurants.
- Delivery fees charged to customers.
- Subscription plans like Swiggy One, which offers benefits such as free delivery and discounts.
- Advertising for partner restaurants on the platform.
Swiggy’s growth strategy centers on expanding delivery categories and deepening its presence in smaller towns and cities. While food delivery remains the core, Swiggy launched Swiggy Genie for couriering items and Instamart for grocery delivery, diversifying into other high-demand services.
Key Features and Technology
Swiggy has invested heavily in AI-driven technology to improve customer experience, optimize delivery routes, and streamline operations. Some prominent features include:
- Smart Routing and Allocation: Algorithms dynamically allocate orders to the nearest delivery partners, improving efficiency.
- Customer-centric Features: Real-time tracking, quick reordering, and secure payment options.
- Swiggy POP and Swiggy Daily: Affordable, single-serve meal options that cater to individuals seeking quick and budget-friendly meals.
Impact on the Restaurant Industry
Swiggy has profoundly impacted the restaurant and food delivery sector by:
- Boosting Visibility: Smaller eateries and local outlets can gain exposure through Swiggy, reaching more customers than they would otherwise.
- Generating Revenue: Partnering with Swiggy allows restaurants to increase revenue without expanding their physical locations.
- Customer Data Insights: Restaurants receive valuable feedback and data insights from Swiggy, helping them improve their offerings.
Competition and Challenges
Swiggy’s main competitor is Zomato, which also dominates the Indian food delivery market. Both companies regularly innovate, introduce promotions, and expand into new categories, sparking fierce competition. Swiggy also faces challenges like managing costs, maintaining customer satisfaction, and addressing regulatory concerns about labor practices for delivery personnel.
Future Outlook
Swiggy’s ongoing innovation, market expansion into tier-2 and tier-3 cities, and diversification into convenience services position it as a key player in India’s on-demand delivery space. With the rise in demand for quick and convenient delivery services, Swiggy is expected to continue its upward trajectory, contributing to India’s fast-growing gig economy.
Disclaimer: This IPO news report is for informational purposes only and does not constitute financial or investment advice.