Swiggy considers $150 million raise to take India IPO size to $1.4 billion

Indian food delivery startup Swiggy is considering increasing the new share issue component of its initial public offering by $150 million. It aims to raise a total of $1.4 billion in one of the largest IPOs in India this year.

According to a 15-page notice of an extraordinary general meeting filed late last week, the Bengaluru-based startup will ask shareholders to approve raising up to 50 billion rupees ($600 million) through a fresh issue of shares, up from the previously planned $450 million.

Swiggy, valued at $10.7 billion in its last fundraising in early 2022, is considering keeping its plan to sell about $800 million worth of shares from existing investors in an IPO, people familiar with the matter said. The startup is seeking a valuation of about $15 billion in the IPO, according to people familiar with the matter, who cautioned that terms could change in the coming weeks.

Swiggy, which filed for an IPO in secret earlier this year, has scheduled an EGM on October 3 to seek shareholder approval for its revised IPO plans, which include both an expanded fresh issue and an offer for sale by existing shareholders. Indian news site Entrackr was the first to report the EGM notice.

Swiggy, backed by Prosus Ventures, SoftBank, and Accel, is among India’s leading food delivery and quick commerce startups. It posted revenue of $1.4 billion in the fiscal year ended March this year. Its quick commerce service, Instamart, was doing $1 billion in GMV at the time, according to the company’s annual report.

The startup faces stiff competition from publicly traded Zomato, Tata-owned BigBasket and General Catalyst-backed Zepto. “We see the instant commerce space going through a phase of heightened competition over the next 6-12 months,” Bank of America analysts wrote in a note late last month.

“The top 3 platforms are moving into their own territory. Over the last 6-12 months, we’ve seen the top 3 platforms expand their product range, lease larger dark stores, and thus meet greater demand (partly by shifting some of the e-com market to quickcom). Because users are not price sensitive and already have a wider selection of products, it’s not easy for even the top 3 to gain traction in the bastion of others.”

At $1.4 billion, Swiggy’s IPO will be one of the largest public debuts in India this year. Bank of America analysts said last month that Indian companies are poised to raise about $11 billion through IPOs and FPOs in the second half of this year.