Zomato rival Swiggy to file confidential papers with SEBI for $1.2 billion IPO, says Report

Zomato rival Swiggy is reportedly set to file confidential papers with the Securities and Exchange Board of India (SEBI) for an initial public offering (IPO) valued at $1.2 billion, according to a Moneycontrol report. 

The report comes shortly after receiving shareholder approval for the public listing.

The Bengaluru-based foodtech giant plans to raise approximately Rs 3,750 crore (around $450 million) through a fresh issue and up to Rs 6,664 crore (around $800 million) as an offer-for-sale (OFS) component.

Confidential filing approach

Introduced by SEBI in November 2022, the confidential filing route allows companies to submit their draft red herring prospectus (DRHP) without making it public immediately.

This method provides companies with the flexibility to keep sensitive business information private until closer to the actual IPO launch.

Swiggy will be following in the footsteps of other major startups, such as SoftBank-backed Oyo and Tata Play, in utilizing this confidential filing approach.

Swiggy's financial performance and market position

Ahead of the IPO, Swiggy reported a loss of $207 million for the nine months ending in December 2023, with revenues of $1.02 billion during the same period.

Despite the losses, which widened from the previous financial year, Swiggy continues to see substantial revenue growth, rising 45% to Rs 8,625 crore in FY23. In contrast, its main competitor, Zomato, reported a 66% revenue increase to Rs 7,761 crore in FY23, with a significantly narrowed net loss.

Company valuation and shareholders

Swiggy's last valuation was $10.7 billion during its $700 million fundraising in January 2022. Investor Baron Capital subsequently increased this valuation by approximately 13% to $12.1 billion.

Major shareholders include Prosus, which has a 31.7% stake, followed by SoftBank, which has an 8% stake, and Accel Partners, which has a 6% stake. The founders hold 6.7% of the shares.

Preparations for public listing

In preparation for the IPO, Swiggy transitioned to a public entity, renaming itself Swiggy Limited. According to reports, Sriharsha Majety, Co-founder and Group CEO of Swiggy, has been actively engaging with founders of listed companies to align Swiggy’s operations with those of a publicly listed entity. 

It's worth noting that SEBI is expected to review the confidential filing over the next 18 months, which will give Swiggy ample time to finalize its public offering details and ensure compliance with regulatory standards.