Swiggy is gearing up for its imminent IPO and has commenced preparations for its debut on the stock exchange, expectedly after the forthcoming Lok Sabha elections. The company officially transitioned into a public entity earlier this week and has also shortlisted bankers to oversee the IPO syndicate.
Entrackr recently disclosed the firm’s transition into a public entity along with its financial performance for the three quarters of FY24. Concurrently, wealth managers acting on Swiggy’s behalf have been offering a pre-IPO opportunity to High Net Worth Individuals (HNIs), presenting them with shares at a 20% discount on the current valuation, as per three sources familiar with the matter.
According to one of the sources, speaking on condition of anonymity, the shares are being offered at Rs 350 each, valuing the company at Rs 80,000 crore ($9.6 billion), representing approximately a 20% discount. However, sources suggest that the discount range might vary and could potentially exceed the 20% mark.
Swiggy’s current valuation is estimated to be around Rs 1,00,000 lakh crore (over $12 billion), with a minimum investment requirement of Rs 25 lakh for this round, as mentioned by the aforementioned source.
It’s noteworthy that US-based investor Invesco recently increased Swiggy’s valuation to $12.7 billion, marking the second upward revision in its value by Invesco and the third overall for the Bengaluru-based foodtech decacorn.
Queries sent to Swiggy have yet to yield a response.
Swiggy reported Rs 5,476 crore in revenue from operations and a loss of Rs 1,600 crore during the first three quarters of FY24. In the fiscal year ending March 2023, its revenue and losses amounted to Rs 8,265 crore and Rs 4,179 crore, respectively.
In comparison, rival Zomato’s revenue from operations during the first three quarters of FY24 stood at Rs 8,552 crore, with a profit of Rs 178 crore during the same period. Zomato, which went public in 2021, currently boasts a market capitalization of around $20.7 billion.
Despite these numbers, Swiggy is forging ahead with its IPO plans amid increasingly bullish market sentiments, evidenced by recent valuation hikes of several startups, including Meesho, PineLabs, FirstCry, and Ola Electric, all preparing for public listings either this year or early next year.
While Zomato’s favorable financial turnaround may offer optimism to Swiggy’s investment bankers, they are likely cognizant of the challenges ahead, particularly considering the performance disparities between Zomato’s Blinkit and Swiggy’s Instamart. Moreover, the prospect of sustained losses following a successful IPO underscores the uncertainties investors may face, making the $12 billion valuation in private markets appear somewhat optimistic for the near term.
