Swiggy, the leading food and grocery delivery startup, is on the brink of filing its draft red herring prospectus (DRHP) this weekend, raising its IPO size from an expected $1.25 billion to a significant $1.4 billion. This adjustment reflects the intensifying competition in the online grocery delivery sector, where Swiggy's Instamart faces rivals like Zomato-owned Blinkit, Zepto, and Tata-owned BigBasket.
Regulatory Approval and Upcoming Roadshows
Sources indicate that the company's confidential filing with the Securities and Exchange Board of India (SEBI) is nearing approval, paving the way for the DRHP submission. Following the filing, Swiggy's management plans to embark on investor roadshows in India, the US, and Singapore, aiming to generate substantial interest ahead of the IPO.
Growing Market Dynamics
India's food delivery market is projected to reach ₹2 lakh crore by 2030, dominated by a duopoly between Swiggy and Zomato, which collectively command over 90% of the market. With Zomato already listed since 2021, Swiggy is poised to join the public market soon.
Increased Funding and Strategic Moves
The decision to upsize the IPO will allow Swiggy to issue fresh shares worth ₹5,000 crore (about $600 million), an increase from the initial plan of ₹3,750 crore ($450 million). This strategic move is crucial as Swiggy prepares for a highly competitive environment, with no changes planned for the offer-for-sale (OFS) component, which remains capped at ₹6,664 crore (about $800 million).
Valuation Prospects
Swiggy was last valued at $10.7 billion during its fundraising round in January 2022. Current market sentiment suggests the company could achieve a market capitalization of around $10-13 billion upon listing. Key investors in Swiggy include Prosus (32%), SoftBank (8%), and Accel (6%), among others.
Conclusion: A Highly Anticipated IPO
As Swiggy gears up for its IPO, it stands at the forefront of an evolving market landscape, with significant backing and a robust business model. This IPO is one of the most awaited events in the startup space, and investors will be keenly watching its developments in the coming weeks.
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