Get Ready for Swiggy's IPO: Public Subscription Set for November 6-8 at $11.3 Billion Valuation

Prosus and SoftBank-backed Swiggy is gearing up to launch its highly awaited IPO for public subscription from November 6 to November 8, according to multiple anonymous sources who spoke to Source. The anchor book portion is slated for November 5, setting the stage for a significant event in the investment landscape.

IPO Valuation and Size

At the higher end of the price range, Swiggy aims for an IPO valuation of approximately $11.3 billion. The primary component of this offering has been increased to around ₹4,500 crore. Additionally, the offer for sale (OFS) component has been adjusted based on investor interest. Sources indicate that the total size of the IPO is projected to fall between ₹11,700 crore and ₹11,800 crore.

Previous Reporting and Valuation Targets

Earlier reports from Moneycontrol on October 20 revealed that the popular food and grocery delivery platform was targeting a valuation between $11.7 billion and $12.7 billion, with plans to initiate its IPO in early November. The primary component is set to be upsized, adhering to the Securities and Exchange Board of India (SEBI) regulations, which permit a maximum increase of 20% for primary issues.

Details from Draft Prospectus

According to Swiggy's updated draft red herring prospectus (DRHP), the IPO includes a fresh issue component of ₹3,750 crore along with an OFS of up to 182,286,265 equity shares. As Swiggy prepares for this major offering, it faces competition from other players in the market, including Zomato’s Blinkit, Zepto, and BigBasket, owned by Tata.

Comparison with Competitors

While Swiggy is preparing for its IPO, its rival Zomato is exploring funding through the Qualified Institutional Placement (QIP) route. In July 2021, Zomato launched its IPO worth ₹9,375 crore and successfully listed its shares on the Indian stock exchanges. Zomato's stock has seen a remarkable increase, soaring by up to 136.68% over the past year.

Market Context and Historical IPO Performance

In the backdrop of Swiggy's IPO plans, notable IPOs in India have had varied success. Recently, South Korean automotive giant Hyundai raised ₹27,856 crore through its Indian arm's listing—the largest public issue in the country, albeit with a lackluster debut. Other major IPOs, like Paytm (₹18,300 crore) and LIC (₹21,000 crore), have also faced disappointing performances on their listing days.

Key Investors in Swiggy

Swiggy's key investors include Prosus with a 32% stake, SoftBank holding 8%, and Accel at 6%. Other shareholders include Elevation Capital, DST Global, Norwest, Tencent, Qatar Investment Authority (QIA), and Singapore’s GIC. Several investment banks are advising on the IPO, including Citi, JP Morgan, Kotak Mahindra Capital, Jefferies, ICICI Securities, Avendus Capital, and BofA Securities. The law firm Cyril Amarchand Mangaldas is serving as the company’s legal counsel.

Approval from Regulatory Authorities

On September 24, Swiggy received approval from SEBI following its confidential filing of draft share sale documents. The process involves two updated DRHPs: one addressing SEBI’s comments and the other inviting public feedback for a period of 21 days.

Confidential Filing Process

SEBI introduced the concept of confidential filings in November 2022, allowing companies to keep their offer documents private until they finalize their IPO plans. This approach is common in U.S. markets and helps prevent competitors from accessing sensitive strategic information. Tata Play (formerly Tata Sky) was the first to use this route for an IPO but eventually withdrew its listing plans.

Conclusion

As Swiggy approaches its IPO, the combination of its substantial backing, growing valuation, and strategic market positioning suggests it is set to make a significant impact on the Indian stock market. Investors are eagerly anticipating this offering, which promises to open new opportunities in the evolving landscape of food delivery and e-commerce.