Swiggy IPO

To be announced
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About Swiggy

Swiggy Limited, founded in 2014, is a leading online platform for food and grocery delivery in India.

Initially launched as a food delivery startup, Swiggy quickly grew into a major player in the market. Now, it offers a variety of services, including food delivery, quick commerce, and local delivery options. Through its fast-delivery service, Instamart, Swiggy has positioned itself as a leader, competing closely with other big companies like Blinkit and Zepto.

Issue size

Funds Raised in the IPO Amount
Overall ₹11000 crores
Fresh Issue ₹3750 crores
Offer for sale ₹7250 crores

Utilisation of proceeds

Purpose INR crores (%)
Investment in Scootsy (for debt repayment) ₹137.4 (3.66%)
Investment in Scootsy (for Dark Store expansion and lease payments) ₹982.4 (26.16%)
Investment in technology and cloud infrastructure ₹586.2 (15.63%)
Brand marketing and business promotion expenses ₹929.5 (24.79%)
Funding inorganic growth and general corporate expenses 1115.25 (29.74%)

Financials of Swiggy

 

Strengths

  • Swiggy’s operating revenue increased 36% year on year for FY24, reaching ₹11,247 crore. Additionally, the company successfully reduced its losses by 44% to ₹2,350 crore during the same period.
  • Swiggy has an employee base of over 5000, alongside a fleet of more than 200,000 delivery executives, ensuring smooth and efficient operations.
  • The company has diversified its offerings through platforms like Instamart (quick grocery delivery) and Swiggy Genie (pick-up and drop services), expanding its reach into non-food verticals.
  • The company operates in over 500 cities across India, making it a dominant player in various geographic locations.
  • Swiggy uses machine learning algorithms to deliver a more seamless and improved user experience.

Risks

  • Swiggy has faced consistent net losses and negative cash flows since inception. Despite revenue growth from services like Food Delivery and Quick Commerce, high costs such as advertising and delivery pose ongoing challenges.
  • Swiggy’s success relies on cost-effective user acquisition and retention. Changes in preferences or competitor offers could reduce its user base, affecting revenue.
  • Retaining restaurant and merchant partners is crucial. If partners increase prices or switch to competitors, order volumes may decline.
  • Effective management of Dark Stores is vital for Quick Commerce. Poor management could disrupt services, raise costs, and lower user satisfaction.
  • Potential changes in government regulations for the e-commerce and food delivery sectors could threaten Swiggy’s demand and overall business model.

Media coverage

Swiggy is one of India’s leading food delivery platforms and it has transformed into a major player in the quick commerce space through its Instamart business. As of 2024, it had a presence in over 500 cities across India, with its food delivery and quick commerce services reaching millions of households.

In the financial year 2023-24, Swiggy’s B2C gross order value (GOV) reached an impressive ₹35,000 crores, driven by both food delivery and the rapid growth of Instamart. Despite this surge, quick commerce, particularly Instamart, accounts for a significant portion of the company’s losses, contributing to 91% of Swiggy’s overall EBITDA losses. With an upcoming IPO valued at about ₹11,600 crores, Swiggy aims to raise fresh capital to bolster its quick commerce arm by adding more dark stores and continue its fight against growing competitors like Zomato’s Blinkit and Zepto.

You can read this post here by Finshots to learn more about Swiggy’s business and its IPO.