Swiggy on Tuesday filed the red herring prospectus with the Securities and Exchange Board of India (Sebi) for its INR 11,300-crore initial public offering (IPO). The Bengaluru-based food and grocery delivery company increased the targeted primary fundraising through issuance of new shares to INR 4,499 crore from its earlier plan of INR 3,750 crore. In the offer for sale window, the company will now sell 175.1 million shares. Proceeds to also fund tech upgradesThis is compared to the earlier plan of selling 185.3 million shares. In an OFS, existing investors part-sell their stake.Prosus, the largest investor in Swiggy, has decreased the size of its divestment in the company to 109.1 million shares from 118.2 million shares.The SoftBank-backed company is expected to announce its IPO price band on Wednesday. ET had, on Monday, reported that Swiggy would issue shares in the price band of INR 371-390 per share. At the upper end, the company’s valuation would be USD 11.3 billion.After Tuesday’s trading, its listed rival Zomato had a market capitalisation of USD 2.22 lakh crore (about INR 26.5 billion) on the BSE. Zomato’s Blinkit is the market leader in quick commerce, where it competes with Swiggy Instamart.As per the red herring prospectus (RHP), Swiggy plans to allocate 20 percent higher capital to its quick commerce business, at INR 1,179 crore, up from INR 982 crore mentioned in the draft RHP. This underscores the growing intensity of quick commerce rivalry and the potential the company sees in the segment as consumer demand continues to soar for 10-20 minutes delivery.The company said it intends to invest INR 755.4 crore in expanding its dark store network, while lease and licence payments for dark stores or warehouses would amount to INR 423.3 crore. This will take Swiggy’s dark store count to 741, covering about 2.59 million square feet. At the end of the June quarter, Swiggy Instamart had 557 dark stores while Blinkit had 639. At the end of the September quarter, Blinkit’s dark stores had shot up to 791. As of September 10, the company had 605 active dark stores.Zepto—among the top three players, besides Instamart and Blinkit—is raising another INR 150 million in a top-up to its INR 1 billion funding in the past four months. The Mumbai-based firm has more than 500 dark stores.Swiggy said it intends to spend INR 703.4 crore on technology improvements, including cloud infrastructure and logistics optimisation, while allocating INR 317.7 crore for marketing to boost its presence, with a focus on InstamartOriginally filed with Sebi in April, the IPO has evinced strong interest from global and domestic investors, including BlackRock, CPPIB and SBI Mutual Fund.
Published On Oct 30, 2024 at 08:00 PM IST
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