Swiggy recently announced its plan to go public, which caught the attention of investors and market analysts. Starting in 2014 as a food-delivery company, Swiggy has grown to become a huge commerce giant. It has diversified into grocery delivery (Instamart) and other hyperlocal delivery services. As a result, Swiggy is in the line to become one of the top players in the Indian food delivery market, competing directly with Zomato.
In this blog today, we are going to know what this move by Swiggy is going to bring for the investors. Let’s go through, one by one, what investors need to know about this IPO.
Key Details Investors Need to Know about Swiggy IPO
Here are the key things to know.
IPO Details
Swiggy is all set to expand its domain and enter the public market. With its upcoming IPO, Swiggy is expected to raise Rs. 3750.10 cr via fresh issue and Rs. 6664 cr via an offer-for-sale. With the approval of its shareholders, Swiggy aims to raise a total of Rs. 10414 cr or $1.25 billion through this IPO. The offer for sale will allow existing shareholders to sell a portion of their stakes in the company.
These funds which will be raised from the IPO are expected to be used strategically by the commerce giant which is going to prove beneficial for its investors.
Financials
Swiggy is going to be under the scrutiny of investors and most of them will most likely focus more on the financial aspects than the others for online investing. Swiggy has shown substantial revenue growth over the years, driven by the increasing adoption of food delivery services in India.
Swiggy has two business segments. The first is food delivery and the second is Instamart, which is its quick commerce segment. In FY 2024, the total revenue of the company increased to Rs. 7800 cr, which was Rs. 5800 cr in FY2023.
Existing Competition
The food delivery market in India is highly competitive with significant opportunities for growth, driven by urbanization, increasing internet penetration, and changing consumer habits.
The market dynamics include competition from Zomato, which went public earlier and has set a benchmark for Swiggy. Swiggy is also looking at the $10 billion valuation, against which Zomato at present values at $18.7 billion. Zomato will give tough competition to the company, which investors should be aware of.
Use of Funding
It is also important to know the usage of funding by the management. The funds raised from the IPO are expected to be used for expanding service offerings. The offer for sale, on the other hand, would provide an exit for current investors.
The leadership and their vision for Swiggy’s growth will be critical for investor confidence. Investors will look at the experience and track record of the management team in navigating the competitive landscape.
Thorough due diligence and an understanding of Swiggy’s strategic initiatives and market positioning is essential for making informed investment decisions. As with any IPO, weighing the risks and growth potential will be crucial for investors looking to add Swiggy to their portfolios.
Conclusion
Wrapping up, one can say Swiggy’s upcoming public offering presents a significant opportunity for investors to partake in the growth of one of India’s leading food delivery platforms. With a robust business model, rapid revenue growth, and strategic diversification into areas like grocery delivery, Swiggy is well-positioned to capitalize on the expanding digital economy in India.
However, potential investors should carefully consider the competitive landscape, the company’s path to profitability, and the broader economic and regulatory environment.
