Swiggy, the SoftBank-backed food delivery powerhouse, is setting its sights on a valuation of approximately $15 billion for its forthcoming initial public offering (IPO), aiming to raise between $1 billion and $1.2 billion. This IPO is poised to become one of the largest Indian stock market listings of 2024.
IPO Details and Market Impact
According to Reuters, Swiggy has already secured shareholder approval for an IPO that could raise up to $1.25 billion. The company’s confidential filing with the Indian markets regulator is anticipated to be cleared within the next month, followed by the release of a public prospectus.
This IPO comes as Swiggy competes with Zomato in the online food delivery sector, where both companies are capitalizing on the burgeoning quick commerce trend, delivering groceries and other products within 10 minutes. Swiggy’s last funding round, led by Invesco in 2022, valued the company at $10.7 billion.
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Strategic Expansion and Market Context
The proceeds from the IPO are planned to be invested in expanding Swiggy’s quick commerce segment, Instamart, and in opening additional warehouses to enhance its competitive edge against Zomato. Zomato’s shares have more than doubled since its 2021 IPO, with a current market valuation of around $28 billion.
Goldman Sachs has highlighted the significance of quick commerce, noting that it currently represents $5 billion, or 45%, of India’s $11 billion online grocery market. The segment is projected to capture 70% of this market by 2030.
Despite Swiggy’s profitability in its food delivery business, its grocery delivery arm, Instamart, remains in the red. The company operates around 550 grocery warehouses across 35 cities. The upcoming IPO is expected to bolster Swiggy’s position in the competitive online grocery and quick commerce landscape.
