Winning Bizness Desk
Mumbai. Online food delivery platform Swiggy has received approval from the Securities and Exchange Board of India (SEBI) to proceed with its Initial Public Offering (IPO). The company had submitted its draft IPO papers to SEBI in April and is now looking to launch the offering as early as November 2024. Through this IPO, Swiggy aims to raise over Rs 11,000 crore, achieving a valuation of approximately Rs 1.25 lakh crore. The IPO will consist of fresh shares valued at Rs 5,000 crore. Initially, Swiggy had targeted raising about $1.25 billion (approximately Rs 10,000 crore), with plans to secure Rs 3,750 crore through new share issuance and Rs 6,664 crore through an Offer-for-Sale (OFS).
Competing with Rivals Zomato and Blinkit
Swiggy's strategic move to go public is driven by its desire to enhance competition with rivals Zomato and Blinkit. Since Swiggy filed its draft IPO papers, both Zomato and Blinkit have reported increased profitability. Additionally, newer entrants like Zepto have gained traction in the market, raising $1 billion in funding over the past two months. Walmart has also intensified the competition by launching its quick commerce service through Flipkart Minutes.
Financial Performance and Revenue Growth
Swiggy's financial health has shown notable improvement, with its revenue increasing by 36% in FY 2024 to reach Rs 11,247 crore, up from Rs 8,265 crore in the previous financial year. The company has also managed to reduce its losses by 44%, recording a loss of Rs 2,350 crore in FY 2024, compared to Rs 4,179 crore in the previous year. This reduction in losses can be attributed to effective cost management strategies. Although Swiggy's performance still lags behind Zomato, the gap is narrowing. Zomato reported a revenue of Rs 12,114 crore in FY 2024 and achieved a profit of Rs 351 crore, while Swiggy's revenue stood at Rs 11,247 crore, with a loss of Rs 2,350 crore. As Swiggy prepares for its IPO, market analysts will be closely watching the company's efforts to establish a stronger foothold in the competitive online food delivery sector.
