Swiggy, a prominent Indian food delivery company backed by SoftBank, is planning to pursue a valuation of approximately $15 billion for its upcoming initial public offering (IPO), aiming to raise between $1 billion and $1.2 billion, according to three individuals familiar with the matter. If successful, this IPO would mark one of the largest offerings in India this year.
Swiggy, which competes directly with Zomato in India’s online food delivery market, has been heavily investing in the growing quick commerce sector, where groceries and other products are delivered within 10 minutes. In April, Swiggy secured shareholder approval for an IPO intended to raise up to $1.25 billion. A confidential filing with the Indian markets regulator is expected to receive clearance within the next month, paving the way for the company to file a public prospectus.
The target valuation of around $15 billion for Swiggy’s IPO, while substantial, is still subject to change, as noted by the sources, who requested anonymity due to the private nature of the discussions. In response to a Reuters inquiry, Swiggy declined to comment on what it termed “market speculation.” Swiggy’s most recent funding round, led by Invesco in 2022, valued the company at $10.7 billion.
A source indicated that Swiggy plans to utilize the funds from the IPO to expand its Instamart quick commerce business and establish additional warehouses, aiming to strengthen its competitive stance against Zomato. Zomato’s shares have more than doubled since its listing in 2021, bringing its market valuation to approximately $28 billion.
Goldman Sachs reported in April that quick commerce accounted for $5 billion, or 45%, of India’s $11 billion online grocery market, with expectations that this segment could grow to capture 70% of the market by 2030. Swiggy has been increasingly focusing on its Instamart business, despite it being currently unprofitable, unlike its food delivery service. The company operates around 550 grocery warehouses across 35 cities in India.
Featured Image courtesy of The Star
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