Swiggy has received approval from its shareholders for its upcoming initial public offering (IPO), as disclosed in regulatory filings. 

According to the filings submitted to the Registrar of Companies, the food and grocery delivery company aims to secure up to Rs 3,750 crore ($450 million) in fresh capital through the IPO. 

Additionally, it plans to include an offer-for-sale (OFS) component of up to Rs 6,664 crore ($800 million).

Although Swiggy has not yet filed its IPO documents with the Securities and Exchange Board of India (Sebi), it intends to raise approximately Rs 750 crore from anchor investors in a pre-IPO round. 

Swiggy is among several new-age startups, including omnichannel retailer Firstcry, Ola Electric, and Awfis, gearing up to go public this year.

The special resolution authorizing the IPO was approved at an extraordinary general meeting (EGM) of Swiggy’s shareholders held on April 23.

Prosus, a Dutch-listed company, holds the largest stake in Swiggy at 33%, followed by SoftBank. Other notable shareholders include Accel, Elevation Capital, Meituan, Norwest Venture Partners, Tencent, DST Global, Qatar Investment Authority, Coatue, Alpha Wave Global, Invesco, Hillhouse Capital Group, and GIC.

According to data from Tracxn, the company’s cofounders Sriharsha Majety, Nandan Reddy, and Rahul Jaimini possess stakes of 4%, 1.6%, and 1.2%, respectively. Jaimini transitioned from his operational role in 2020 to join another venture, Pesto Tech.

In the extraordinary general meeting held on April 23, Majety and Reddy were appointed as executive directors of Swiggy. Majety assumed the role of managing director and group CEO, while Reddy was designated as whole-time director and head of innovation.

Let us Take A Peek At Swiggy’s Financials

Swiggy disclosed a significant growth in operating revenue for the fiscal year ending in March 2023, reaching Rs 8,265 crore, marking a 45% increase from FY22. However, the company also experienced a 15% rise in net loss, which amounted to Rs 4,179 crore.

According to a report, Invesco, the lead investor in Swiggy’s $700 million round in January 2022, elevated the company’s valuation to $12.7 billion. 

Another investor, Baron Capital, also raised Swiggy’s fair value to $12.1 billion in the previous month.

In the fiscal year ending March 2023, the company witnessed a substantial surge in operating revenue, totaling Rs 8,265 crore, while its net loss expanded to Rs 4,179 crore, representing a 15% increase.

During the review period, Swiggy made significant investments in expanding its quick-commerce vertical, Instamart, leading to a substantial increase in total expenses. 

According to regulatory filings obtained from Tofler, Swiggy’s total expenses in FY23 amounted to Rs 12,884 crore, marking a 34% increase from the previous year.

Apart from the purchase of stock-in-trade, advertising and promotional expenses constituted the largest portion of Swiggy’s expenses. The company’s marketing expenditure surged to Rs 2,362 crore, accounting for 28% of its operating revenue in FY23, compared to 44% in FY22.

Swiggy, headquartered in Bengaluru, saw a rise in its employee benefit expenses in FY23, reaching Rs 2,130 crore compared to Rs 1,708 crore in the preceding year.

A report on January 25 stated Swiggy’s decision to reduce its workforce by 6%, affecting approximately 350-400 roles across various departments such as technology, call center, and corporate functions. 

This move was seen as in part of Swiggy’s strategy to streamline operations as it aims for profitability in preparation for its IPO.

Notably, Swiggy had previously undertaken a companywide restructuring exercise in January of the prior year, resulting in the dismissal of 380 employees.

In May of the same year, Sriharsha Majety, Swiggy’s co-founder and CEO, announced that the company’s food delivery segment had achieved profitability as of March 2023, factoring in all corporate expenses except for employee stock option costs.

Revenue Structure

Swiggy generates its primary revenue through online platform services offered to merchants such as restaurants, grocery vendors, and delivery partners, supplemented by revenue streams including advertising services, the sale of food and traded goods, subscriptions, and other platform services.

Breaking down its revenue sources, Swiggy recorded earnings of Rs 3,352 crore from the sale of food and traded goods in FY23, marking a 58% increase year-on-year. 

Meanwhile, revenue from service sales, constituting a larger portion of its total revenue, grew by 39% to Rs 4,786 crore during the same period.

In contrast, Swiggy’s primary competitor, Zomato, disclosed consolidated operating revenue of Rs 7,079 crore for FY23, representing a robust 69% year-on-year growth. 

The Gurugram-based company recorded a net loss of Rs 971 crore in FY23, a decrease from Rs 1,222 crore in FY22.

During the fiscal year 2023, Swiggy acquired restaurant technology and dining platform Dineout in an all-stock transaction from Times Internet, the digital media division of Bennett, Coleman and Company Ltd (Times Group), the publisher of ET.

As per Prosus, Swiggy’s largest shareholder, in the current fiscal year, the company’s core food business expanded by 17% in the six months ending on September 30, achieving a gross merchandise value (GMV) of $1.43 billion. 

At the same time, Swiggy’s quick-commerce venture, Instamart, experienced a significant 63% growth in GMV during the same period.