Swiggy Receives Shareholder Nod to Upsize IPO Fresh Issue to $1.4 Billion

SoftBank-backed Indian food delivery company Swiggy has received approval from its shareholders to increase the size of the fresh issue component of its upcoming Initial Public Offering (IPO). The fresh issue, initially set at ₹37.5 billion ($595 million), will now be upsized to ₹50 billion ($595 million), according to sources familiar with the matter. With this increase, Swiggy's IPO will grow from $1.25 billion to $1.4 billion, making it one of the largest public offerings in India this year.

Swiggy’s original IPO size surpassed NTPC Green Energy’s $1.2 billion public offering, securing its position as the largest IPO in the country for 2024 so far. Despite the increase in the fresh issue size, the company's existing shareholders will continue to sell shares worth ₹66.64 billion, which remains unchanged.

India's Thriving IPO Market

Swiggy’s move to increase its IPO size comes as India’s IPO market witnesses significant growth. As of October 2024, nearly 250 companies have raised over $9 billion, more than double the amount raised during the same period in 2023, according to data from LSEG (London Stock Exchange Group). The booming market reflects investor confidence and the rapid expansion of various sectors, especially technology-driven businesses like Swiggy.

Valuation and Future Plans

Swiggy filed its draft IPO papers last week and is reportedly targeting a valuation of $15 billion. The Bengaluru-based company plans to use the funds raised from the fresh issue to expand its quick-commerce business, Instamart. Instamart competes in the fast-growing 10-minute grocery delivery space, where rivals like Zomato and Zepto are racing to offer consumers everything from groceries to higher-margin electronics.

While Swiggy has long been a dominant player in India’s food delivery market, its diversification into quick-commerce is seen as a key strategy for long-term growth. This business model focuses on delivering essentials to customers in 10 minutes, an area where companies like Zomato and Zepto are also making significant investments.

Competitors and Market Dynamics

Swiggy faces stiff competition from Zomato, another major food delivery player in India, as well as newer entrants like Zepto in the quick-commerce space. Both companies are vying to capture a larger share of India’s growing demand for fast, on-demand delivery services. Swiggy’s Instamart has been a crucial part of its strategy to compete not just on food delivery but across a broader range of consumer services.

Swiggy did not immediately respond to requests for comment on the IPO upsizing, but industry analysts suggest that the company is positioning itself to capitalize on its leadership position in both food delivery and quick commerce.

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In summary, Swiggy’s decision to upsize its IPO fresh issue marks a significant milestone for the company and highlights the broader growth of India’s IPO market. With a valuation of $15 billion on the horizon and plans to expand its quick-commerce business, Swiggy is well-positioned to maintain its competitive edge in both the food delivery and instant retail markets.

Source: CNBC-TV18

[Disclaimer: The content in this blog is for informational purposes only. Financial details and company strategies are based on available reports and are subject to change based on official announcements.]