Swiggy, the popular food and grocery delivery platform, has moved a step closer to its highly anticipated Initial Public Offering (IPO). On September 26, the company submitted its updated draft red herring prospectus (UDRHP-I) to the Securities and Exchange Board of India (SEBI). The IPO includes a fresh equity issuance worth ₹3,750 crore and an offer-for-sale (OFS) of 18.52 crore shares held by existing shareholders. The updated filing also indicates potential fundraising in a pre-IPO round, which, if successful, will reduce the size of the fresh equity issuance accordingly.

This development follows the confidential submission of the initial offer document on April 30, and SEBI's acceptance of the same earlier this week. As per regulatory requirements, Swiggy must update its documents and refile the UDRHP-II, reflecting any changes arising from public feedback. Once SEBI grants final approval, Swiggy can launch its IPO.

🔍 Top 10 Key Points from Swiggy's Updated DRHP-I

1. IPO Size and Structure:

   • The IPO will involve a fresh issue of shares worth ₹3,750 crore.
   • The OFS will include 18.52 crore shares from existing stakeholders.

2. Fundraising Plans:

   • Swiggy is also exploring a pre-IPO funding round. If successful, the fresh issue will be adjusted to reflect the new capital infusion.

3. Listing and Compliance:

   • Swiggy has used the confidential pre-filing process to maintain flexibility and reduce public disclosure until necessary.
   • Following public feedback, Swiggy will file the final DRHP-II, paving the way for SEBI's approval and the IPO launch.

4. IPO Managers:

   • Kotak Mahindra Capital Company, Citigroup Global Markets India, Jefferies India, and Avendus Capital are acting as the book-running lead managers (BRLM).
   • Link Intime India Private Ltd will serve as the registrar to the issue.

5. Selling Shareholders:

   • Major investors such as MIH India Food Holdings, Accel India IV (Mauritius), Apoletto Asia, Alpha Wave Ventures, and Tencent Cloud Europe B.V. are among the corporate shareholders selling their stakes.
   • Individual shareholders like Sriharsha Majety, Samina Hamied, and Rahul Jaimini are also part of the OFS.

6. Financial Overview:

   • In FY24, Swiggy's revenue from operations stood at ₹11,247.39 crore, showing a robust increase from ₹8,264.59 crore in FY23.
   • Net losses have narrowed to ₹2,350.24 crore from ₹4,179.30 crore in the previous fiscal year, signaling improved cost management.

7. Peer Comparison:

   • Swiggy's only listed peer is Zomato, which reported a revenue of ₹12,114 crore in FY24.
   • Zomato has a positive EPS of ₹0.41, while Swiggy reported a negative EPS of ₹-10.70.

8. Business Model & Segments:

   • Swiggy operates through multiple verticals, including Food Delivery, Quick Commerce (Instamart), B2B Supply Chain Solutions, and Platform Innovations such as Swiggy Genie and SteppinOut.

9. Strengths & Market Position:

   • Swiggy is known for its unified app experience and extensive partner network, making it a preferred choice for restaurants, merchants, and delivery partners.
   • The company’s ability to innovate and drive high-frequency hyperlocal commerce has led to a consistent increase in user engagement.

10. Industry Potential & Market Dynamics:

    • The Indian food services market, which is largely unorganized, has substantial growth potential.
    • Cloud kitchens and the growing trend towards organised food services are likely to support future market expansion.

🔔 Key Risks for Investors:

1. User Acquisition Costs: Failure to attract new customers at an affordable cost or retain existing users could negatively impact business growth.
2. Delivery Partner Retention: Swiggy's model heavily relies on its delivery partners. Inability to retain or attract these partners efficiently could disrupt operations.
3. Regulatory Compliance & Governance: Being a tech-driven company, any lapses in regulatory compliance or governance could lead to reputational damage and financial penalties.

💼 Swiggy's Group Companies:

Swiggy's group includes Loyal Hospitality Pvt Ltd, Loyal Hospitality Kitchens Pvt Ltd, MIH India Food Holdings B.V., and Vijayawada Hospitalities Pvt Ltd.

📅 Lock-In Period for Anchor Investors:

The anchor investor portion will have 50% of the shares locked in for 90 days, and the remaining 50% locked in for 30 days from the date of allotment, ensuring stability in the initial trading phase post-listing.

With this revised filing, Swiggy is preparing for one of the most anticipated IPOs in the Indian food delivery space. As the company narrows its losses and strengthens its revenue base, the upcoming IPO could mark a pivotal moment for both Swiggy and its investors.