Swiggy gets Sebi nod for proposed $1.25 billion IPO

Food and grocery delivery platform Swiggy has received approval from the Securities and Exchange Board of India (Sebi) for its proposed $1.25 billion public issue, according to sources. The Bengaluru-based company had filed draft papers for the IPO with the market regulator through the confidential filing route in April this year.

Swiggy will now need to file an updated draft red herring prospectus (UDRHP) with the market regulator. The public will be given 21 days to give feedback on the UDRHP before launching the IPO.

The IPO is expected to raise Rs 3,750 crore ($450 million) in fresh capital, along with an offer-for-sale (OFS) component of up to Rs 6,664 crore ($800 million). The size could be increased before the launch, said bankers. Major investors such as Prosus, Swiggy’s largest shareholder with a 33% stake, and SoftBank are likely to sell part of their holdings through the OFS. Other key shareholders include Accel, Elevation Capital, Meituan, Tencent, Norwest Venture Partners, DST Global, Coatue, Invesco, and GIC.

Swiggy declined to comment on queries from ET.

In the first three quarters of FY24, Swiggy reported revenue of Rs 5,476 crore with a loss of Rs 1,600 crore. Its main competitor, Zomato, posted revenue of Rs 12,114 crore for the year ended March 31, 2024, and turned profitable with a net profit of Rs 351 crore during the same period.

Zomato raised Rs 9,375 crore through its IPO in July 2021. The stock has surged 192% over the last year, compared to the Nifty’s 32% gain. Zomato’s shares, originally offered at Rs 76 apiece during the IPO, closed at Rs 291.70 on Tuesday.

SEBI introduced the 'pre-filing' route in 2022, allowing companies to keep details of preliminary filings confidential. This route provides companies with greater flexibility in determining the issue size. The number of fresh shares proposed can be adjusted by up to 50% until the updated DRHP is filed.