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₹ 14820 / 38 shares

IPO Details

RHP/DRHP

Issue Date

06 Nov - 8 Nov'24

Investment/lot

₹ 14820

Price Range

371 - 390

Lot Size

38

IPO Size

₹ 11329.30 Cr

IPO Listing Details

Listing On

13 Nov'24

Issue Price

390

Listed Price

₹ 420

Retail Gain/Listing Gain

7.69%

Start date

End date

Allotment of bids

Refund Initiation

Listing on exchange

Swiggy is a new-age, consumer-first technology company offering users an easy-to-use convenience platform, - to browse, select, order and pay for food (food delivery business), grocery and household items (‘Instamart’) through a unified app, and have their orders delivered to their doorstep through the company’s on-demand delivery partner network.

The lot size for the Swiggy IPO is 38 and in multiples of 38 thereafter. Below is a table that gives information on the minimum and maximum lot size that retail investors and HNIs can get.

Particulars Lots Shares Amount
Retail (Min)
1
38
14,820
Retail (Max)
13
38
192,660
HNI (Min)
14
38
207,480
HNI (Max)
67
38
992,940

Pioneers of high-frequency hyperlocal commerce categories driven by an innovation-led culture

Swiggy has successfully pioneered the hyperlocal delivery industry in India, launching food delivery in 2014 and quick commerce in 2020. Due to the pioneering status of Swiggy, it is well-recognised as a leader in hyperlocal commerce innovation and as a brand, it is synonymous with the categories it is present in, according to the Redseer Report.

A consistently growing network of users

In the company’s tenth year of operations, they reached a milestone of 112.73 million users to have transacted on their platform (ever-transacted users); this milestone was reached on June 30, 2024.

Swiggy” brand delivered through a unified app with consistent user experience

According to the Kantar BrandZ Most Valuable Indian Brands Report 2024, Swiggy is the most valuable brand in the consumer technology & services platforms category and is among the top 25 most valuable brands in India, overall (Redseer Report) (section 7, page 19)

  • The company has incurred net losses in each year since incorporation and has negative cash flows from operations. If they are unable to generate adequate revenue growth and manage their expenses and cash flows, they may continue to incur significant losses.

  • Attracting and retaining delivery partners is critical to their business, and failure to do so in a cost-effective way may have an adverse effect on their business, financial condition and results of operations.

  • If they fail to retain their existing or acquire additional restaurant partners, merchant partners and brand partners in a cost-effective manner, their business can be affected. Further, if partners on their platform try to pass on increased operating costs to users, users may decrease the frequency with which they interact on our platform and order volumes on the platform may decline.

WATCH AND LEARN
All you need to know about Swiggy IPO
Food and grocery delivery giant Swiggy is set to make its stock market debut with the launch of its initial public offering (IPO). Swiggy IPO opens for subscription on November 6, 2024 and closes on November 8, 2024.

Presentation of key financial metrics and indicators to assess Swiggy's financial health.

Particulars (in Rs. million)

Particulars (in Rs. million)

Particulars (in ₹ Million) As of 31st March, 2024 As of 31st March, 2023 As of 31st March, 2022
Total Income
116,343.49
87,144.53
61,197.77
Profit/(Loss) before tax
(23,502.43)
(41,793.05)
(36,288.96)
Net profit/(loss)
(23,502.43)
(41,793.05)
(36,288.96)
EPS
(10.70)
(19.33)
(18.62)
EBITDA
(18,355.67)
(39,103.37)
(32,337.62)

The company earns revenue from sale of services and sale of goods on our platform. Their revenue from services primarily includes,

  • Commissions that they charge their restaurant partners and merchant partners
  • Advertising revenue that they earn from restaurant partners, merchant partners and brand partners for their advertising tools and services,
  • Fees that they charge users and delivery partners for the use of our technology platform and
  • Subscription revenue that they earn from users for their Swiggy One membership program.

While the company continues to bear losses, they have shown commitment to improving their financials. Their logistics and grocery business continues to drive revenues for the company.

The company started food delivery business in 2014 and have since then grown leaps and bounds. Their total revenues have grown from 61,197.77 million in FY22 to 116,343.49 million in FY24. Similarly, their EBITDA Margin has grown consistently and is now only -0.2%. Their losses have halved from FY23 and now stands at ₹23502.43 million as against ₹41,793.05 crores in FY23.

As of the date of this red herring prospectus, the company has two subsidiaries. The shareholders for each of the subsidiaries is given below:

Holding Company: Scootsy

Name of the Shareholder Number of equity shares of ₹10 each
Swiggy Limited
24,03,842
Lakshmi Nandan Reddy Obul
1
Total number of shares
24,03,842

Holding Company: Supr Infotech

Name of the Shareholder Number of equity shares of ₹10 each
Swiggy Limited
969,254
Lakshmi Nandan Reddy Obul
1
Total number of shares
969,255

Holding Company: Lynks Logistics Limited

Name of the Shareholder Number of equity shares of ₹10 each
Scootsy Logistics Private Limited
2,23,59,37,371
Sriharsha Majety
1
Lakshmi Nandan Reddy Obul
1
Rahul Bothra
1
Bharat Arora
1
M. Shridhar
1
Avantika Bajaj
1
Total number of shares
2,23,59,37,377

Management Details:

Name Directors
Anand Kripalu
Chairman and Independent Director
Sriharsha Majety
Managing Director and Group Chief Executive Director
Lakshman Nandan Reddy Obul
Whole-time director – Head of Innovation
Shailesh Vishnubhai Haribhakti
Independent Director
Sahil Barua
Independent Director
Suparna Mitra
Independent Director
Anand Daniel
Nominee Director
Ashutosh Sharma
Nominee Director
Sumer Juneja
Nominee Director (Non-Executive)
Roger Clark Rabalais
Nominee Director (Non-Executive)

Comparison with peers:

Name of the peer Revenue from operations Return on Net Worth NAV P/E
Zomato Limited
121,140
1.72%
23.14
634.50

Anchor Investors:

The anchor investor bid opens and ends on November 5, 2024. The company may allocate up to 60% of the QIB portion to anchor investors, out of which one third will be allocated to Mutual Funds.

Book Running lead managers:

Kotak Mahindra Capital Company Limited

Citigroup Global Markets India Private Limited

Jefferies India Private Limited

Avendus Capital Private Limited

J.P. Morgan India Private Limited

BofA Securities India Limited

ICICI Securities Limited

Subscription Details:

Qualified Institutional Buyers: 75%

Non-Institutional Investor: 15%

Retail Individual Investor: 10%

The following factors can help one understand the potential benefits of investing in Swiggy IPO

  • India is one of the fastest growing large economies in the world with consumption being a major growth driver. With a total population of 1.4 billion, India is also the most populous nation in the world and this large consumer base drives significant demand for the consumer-oriented retail markets. By investing in Swiggy IPO, the investors can avail of an opportunity to be a part of a company that caters to a billion, not just millions.

  • Hyperlocal commerce platforms are rapidly evolving to serve the emerging needs of various stakeholders and enhance their profitability. Innovative integration of multiple adjacent use-case into an integrated platform may lead to improved scalability and improved unit economics by leveraging existing capabilities. By investing in Swiggy IPO, investors can have a slice of a new age, innovative company that is driving the industry.

  • Key investors like Accel India IV (Mauritius) Limited, Alpha Wave Ventures, Apoletto Asia Ltd, etc are selling their stakes in the company thus giving investors the potential for high returns.

  • Key management personnel like Lakshmi Nandan Reddy Obul, Sriharsha Majety, P.R. Venkatrama Raja, are selling their stakes in the company thus giving investors the potential for high returns.

Retail and HNI Applications

The retail issue portion of the Swiggy IPO consists of not less than 2,89,74,491 equity shares of face value of ₹10. Not less than 10% of the net offer is for retail individual bidders

  • Retain and grow user base by expanding their offerings and growing their partner network

  • Expand Dark Store footprint and basket-sizes for quick commerce

  • Invest in technology and optimise their last-mile network to enable efficient scaling of operations to service more users

Conclusion

Swiggy, a pioneer in the hyperlocal commerce platform industry, launched food delivery in 2014 and quick commerce in 2020. Over time, the company has quickly grown to be one of the top two food delivery companies in India. The company’s intuitive app, diverse offerings, timely discounts and offers, and a wide network of partners have enabled them to speed up deliveries and offer great choices.

However, hyperlocal platforms like Swiggy also face many challenges like continued losses, economic and inflationary pressures, logistics complexity and the rise of models like ONDC. If you want to invest in the IPO, ensure you do your homework and asses the risks and challenges thoroughly.

Opening of account will not guarantee allotment of shares in IPO. Investors are requested to do their own due diligence before investing in any IPO.

This article is crafted purely for informational purposes and it is not produced from the desk of the Kotak Securities Research Team, nor is it a report published by the Kotak Securities Research Team. The securities mentioned herein serve strictly as examples and are not to be interpreted as investment endorsements. All information is derived from various secondary sources and is subject to potential changes. It is recommended to seek advice from a professional financial advisor before undertaking any investment activities.

Swiggy IPO FAQs

Swiggy IPO will list on 2024-11-13.

11329.30 is the issue size of Swiggy IPO.

The minimum lot size is 38 shares and the investment required is ₹14820.

The price band of Swiggy IPO is ₹371 to ₹390.

You can read more about Swiggy and its IPO from the company’s red herring prospectus (RHP) here.

The Swiggy IPO has an issue size of ₹341.95 crores. The IPO opens for subscription on 25/09/2024 and closes on 27/09/2024.

Link Intime India Private Limited is the registrar for this IPO.

The issue size of Swiggy IPO is 11, 327.43 crores

The opening date for Swiggy IPO is Nov 6, 2024 and the closing date is Nov 8, 2024.

The allotment date for Swiggy IPO is Nov 11, 2024.

The Swiggy IPO is getting listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).

38 shares

The price band of Swiggy IPO is ₹371-390

The Swiggy IPO has an issue size of ₹11,327.43 crores. The IPO opens for subscription on 06/11/2024 and closes on 08/11/2024.

The Swiggy IPO business Model is as given below:

Our revenue from services primarily includes, (i) commissions that we charge to our restaurant partners and merchant partners which is a function of the perceived value of our offerings to them on our platform, (ii) advertising revenue that we earn from restaurant partners, merchant partners and brandpartners for our advertising tools and services, (iii) fees that we charge to users and delivery partners for the use of our technology platform and (iv) subscription revenue that we earn from users for our Swiggy One membership program

The company’s revenues from services includes the following:

  • Commissions from restaurant partners and merchant partners which is a function of the company’s offering to them on their platform

  • Advertising revenue that the company earns from restaurant partners, merchant partners and brand partners for their advertising tools and services

  • Fees the company charges to users and delivery partners for using their technology platform and

  • Subscription revenue that they earn from users for Swiggy one membership program

Link Intime India Private Limited is the registrar for this IPO.

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