Swiggy IPO to open for subscription on November 6; here are 10 key things to know from RHP

Swiggy IPO: The Indian online food ordering and delivery platform, Swiggy, will launch its initial public offering next week. The IPO will open for subscription on Wednesday, November 6 and conclude on Friday, November 8. The allocation for anchor investors is set to occur on Tuesday, November 5. The price band of the issue will be set tomorrow (Wednesday, October 30).

The basis for the allotment of Swiggy IPO shares is expected to be finalised on Monday, November 11. Refunds will be processed by the company on Tuesday, November 12, and shares will be credited to the demat accounts of allotees on the same day after the refunds. Swiggy shares are anticipated to be listed on the BSE and NSE on Wednesday, November 13.

The share sale will rank as the second-largest stock offering in the country this year, following Hyundai Motor India's $3.3 billion IPO that took place earlier this month and experienced dampened demand from retail investors.

Swiggy IPO: 10 key things from RHP

Here are 10 key things from the Red Herring Prospectus (RHP) that investors might want to know before subscribing to the issue.

Swiggy IPO details

Swiggy IPO, comprises a fresh issue of ₹4,499 crore, and an offer-for-sale (OFS) of 175,087,863 equity shares by the corporate selling shareholders.

In the OFS, the selling shareholders are Accel India IV (Mauritius) Ltd, Apoletto Asia Ltd, Alpha Wave Ventures, LP, Coatue PE Asia XI LLC, DST EuroAsia V B.V, Elevation Capital V Ltd, Inspired Elite Investments Ltd, MIH India Food Holdings B.V, Norwest Venture Partners VIIA-Mauritius, and Tencent Cloud Europe B.V.

Swiggy IPO Average cost of acquisition of the Selling Shareholders

Swiggy IPO Objectives

The company intends to use the net proceeds for investing in its material subsidiary, Scootsy, manage debt, expand its dark store network for the quick commerce segment, and cover lease or license payments associated with those dark stores.

Additionally, it aims to invest in technology and cloud infrastructure. The firm also mentioned that it will use the funds for brand marketing and promotional business expenses. Furthermore, it plans to allocate the funds for supporting inorganic growth through unspecified acquisitions and for general corporate purposes.

Swiggy Business

Swiggy is an innovative technology company focused on consumers, offering a convenient platform that can be accessed through a single app to explore, choose, order, and pay for food (Food Delivery), groceries, and household products (Instamart), with delivery to their doorstep via our network of on-demand delivery partners. The platform enables you to make restaurant reservations (Dineout) and book events (SteppinOut), as well as utilise product pick-up/drop-off services (Genie) and engage in various hyperlocal commerce activities (including Swiggy Minis, among others).

Swiggy Board

The board includes Anand Kripalu, Sriharsha Majety, Lakshmi Nandan Reddy Obul, Shailesh Vishnubhai Haribhakti, Sahil Barua, Suparna Mitra, Anand Daniel, Ashutosh Sharma, Sumer Juneja, and Roger Clark Rabalais.

Swiggy IPO Peer

The company's sole listed peer is Zomato Ltd (with a P/E of 634.50).

Swiggy arm

The company's subsidiaries are Scootsy Logistics Private Ltd and Supr Infotech Solutions Private Ltd.

Swiggy IPO Financials

Swiggy Limited's revenue climbed by 34% between March 2023 and March 2024. Meanwhile, its loss narrowed from ₹4,179.31 crore to ₹2,350.24 crore in the same period.

Swiggy IPO - Key Risks

Some of the key risks are as follows;

• Since its inception, the company suffered net losses in every year and has had negative operating cash flows. If they are unable to create appropriate revenue growth while managing their costs and cash flows, they may continue to suffer severe losses.
• If the organisation fails to keep its existing user base or to gain new users in a cost-effective manner, its business, financial situation, and operating results may suffer.

Lock-in of equity shares allotted to anchor investors

Half of the equity shares distributed to anchor investors in the anchor investor portion will be locked in for 90 days from the date of allotment, while the other half will be locked in for 30 days from the date of allotment.

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