IPO details

The Swiggy IPO is a combination of fresh issue of equity shares worth ₹3,750 crore and an offer-for-sale of 185,286,265 equity shares by existing shareholders. The IPO includes segments for qualified institutional buyers (QIBs), anchor investors, and mutual funds. 

Non-institutional buyers will also have opportunities, with one-third of the allocation set for bidders applying between ₹2 to ₹10 lakh, and the rest for those applying for more than ₹10 lakh, alongside a retail portion

How will the proceeds be used?

Swiggy plans to allocate ₹982 crore—around 27% of the proceeds—towards expanding its dark store network through its subsidiary Scootsy Logistics Private Ltd. This investment will support the growth of Swiggy Instamart, its quick commerce arm, which has become a critical focus area for the Prosus-backed company as it scales rapidly to meet industry demands. 

As of 30 June, Swiggy operated 581 dark stores, ranging in size from 1,400 sq ft to 10,000 sq ft, with an average delivery time of 12.6 minutes across cities.

Additionally, ₹929 crore will be directed towards branding and promotional activities, aimed at enhancing performance marketing and digital media efforts. In FY24, Swiggy spent ₹558 crore on marketing, a slight dip from the previous year. The remaining proceeds will be used for technology upgrades, cloud infrastructure, potential acquisitions, and general corporate purposes.

Listing timeline

With the filing of its draft red herring prospectus (DRHP), Swiggy has kicked off preparations for its public market debut. The company is expected to start roadshows soon, with a likely listing date in November 2024

Quick commerce business

Swiggy’s quick commerce segment has seen significant growth over the past year, reaching a gross merchandise value (GMV) of $2.8 billion in 2023, according to Redseer estimates. However, as competition intensifies, Swiggy recognizes the need for sharper focus on this business to maintain its edge, Mint reported earlier this month.

In FY24, Swiggy Instamart generated ₹1,100 crore in gross revenue, while its main competitor, BlinkIt, reported ₹2,301 crore. Instamart’s gross order value (GOV) for the year was ₹8,100 crore, compared to BlinkIt’s ₹12,469 crore. With BlinkIt and Zepto together commanding 60-65% of the quick commerce market, Instamart faces tough competition, making Swiggy’s planned investments in the unit crucial to gaining market share.

Swiggy may use a bulk of the proceeds to expand Instamart as it looks to tackle rivals in the space, Mint reported exclusively earlier this month. The report added that Instamart’s dark stores are likely to be bigger in size to accommodate more stock-keeping units.

Swiggy peer Zomato’s listing

Swiggy’s upcoming IPO comes more than three years after its larger rival, Zomato, went public. Zomato’s stock has surged nearly 125% this year, closing at ₹280.15 on Thursday, fuelled by its leadership in the sector. The company, which acquired Blinkit—its quick commerce arm—now competes directly with Swiggy’s Instamart.