SoftBank-backed food delivery giant Swiggy is targeting a valuation of around $15 billion for its upcoming stock market offering to raise $1-1.2 billion. According to a report by the news agency Reuters, the deal would make it one of the biggest initial public offerings (IPO) in India this year.
Swiggy competes with Zomato in the online restaurant and cafe food delivery sector. Both have made major bets on the new so-called quick commerce boom, in which groceries and other products are delivered in 10 minutes.
Swiggy IPO details
According to Reuters, Swiggy received shareholder approval in April for an IPO to raise up to $1.25 billion. Capital markets regulator Securities and Exchange Board of India (SEBI) is expected to clear its confidential filing within a month. Following the approval, it will file a public prospectus.
The report said the company targets a valuation of around $15 billion via the upcoming issue, though the final figure can change. Its last funding round, led by Invesco in 2022, valued it at $10.7 billion.
Swiggy aimed to use IPO proceeds to expand its quick commerce Instamart business and open more warehouses to better compete with Zomato. Zomato’s shares have more than doubled since listing in 2021, and its market valuation is around $28 billion.
According to Reuters, Goldman Sachs said in April that quick deliveries accounted for $5 billion, or 45 per cent, of India’s $11 billion online grocery market and forecast the segment to reach a 70 per cent share by 2030.
According to Reuters, Swiggy’s food delivery business is profitable, but the grocery delivery Instamart business is still loss-making. The company has around 550 grocery warehouses in 35 cities across the country.
Meanwhile, e-commerce giant Amazon approached Swiggy and showed interest in the company’s quick commerce business, Instamart, according to a report in the Economic Times. However, there was no official offer for the tablet. The report stated that early discussions paint a difficult chance of a deal being completed, given the complicated structure of the deal in its current form.
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