Swiggy is expected to launch its highly anticipated IPO on November 6.

Swiggy is a technology-driven company focused on consumer convenience, offering a unified app that allows users to easily browse, select, order, and pay for food, groceries, and household items. Its primary business model is a B2C marketplace that connects restaurant and merchant partners, enabling customers to find and purchase a variety of products. Swiggy handles order fulfillment through delivery, reservations, payments, and generating leads for its partners.

The company operates across five main segments: (i) Food Delivery, (ii) Out-of-home Consumption, encompassing dining and events, (iii) Quick Commerce, which provides on-demand delivery of groceries and household goods, (iv) Supply Chain and Distribution, focusing on B2B services, logistics, and warehousing for wholesalers and retailers, and (v) Platform Innovations, introducing initiatives like Swiggy Genie and Swiggy Minis.

The Swiggy platform supports restaurant reservations through Dineout and event bookings via SteppinOut. It also facilitates product pickups and deliveries with Genie, along with other hyperlocal services like Swiggy Minis. Additionally, Swiggy provides a membership program called "Swiggy One," which offers various discounts and perks. Users can benefit from in-app payment options, including a digital wallet named "Swiggy Money" (a prepaid payment instrument), "Swiggy UPI," and a credit card in partnership with HDFC Bank that provides extra advantages.

As of June 30, 2024, Swiggy featured around 19,000 SKUs of grocery and household products. This selection includes (i) everyday essentials like eggs, bread, fruits, and vegetables, (ii) impulse buys such as snacks and quick meals, (iii) regularly purchased items typically bought weekly or monthly, like shampoos and soaps, (iv) on-demand purchases made as needed, including feminine hygiene products, basic pharmaceuticals, personal care items, and stationery, and (v) special occasion and festival-related items, such as sweets, festive supplies, and sports team merchandise.

Beyond catering to consumers, Swiggy offers business support to restaurant and grocery partners, providing tools driven by analytics to boost their online visibility and customer engagement, along with supply chain solutions and an extensive delivery network. As of June 30, 2024, Swiggy reported 11.27 crore active users and a workforce of 5,401 employees.

Reports indicate that the IPO is set to open for public subscription soon after November 6, 2024. The company intends to attract more retail investors by offering a relatively modest valuation for its listing.

Financial Overview and Recent Performance

Swiggy's operational journey has been characterized by significant investments and ongoing challenges in achieving profitability. According to confidential pre-filed documents submitted to the Securities and Exchange Board of India (SEBI) in September, the company has consistently reported net losses. However, these losses are showing signs of reduction, with a net loss of Rs 2,350.24 crore for FY24, down from Rs 4,179.30 crore in FY23 and Rs 3,628.89 crore in FY22.

Swiggy's Competitive Landscape and Market Context

Swiggy's main rival, Zomato, plays a significant role in the online food delivery sector, boasting a market capitalization of Rs 2,24,310.54 crore, which exceeds Swiggy's anticipated valuation of $11.3 billion. Zomato's diverse offerings, including the B2B service Hyperpure and the quick-commerce platform Blinkit, allow it to generate revenue from sources beyond food delivery. Additionally, Zomato's recent acquisition of Paytm's ticketing business has further expanded its range of services

Recently, Zomato's shares have been impacted by the prevailing bearish market sentiment, declining from Rs 265.70 to Rs 253.85 on the BSE over the past week. This market adjustment is influenced by factors including weak corporate earnings and investor hesitancy amid geopolitical uncertainties.

Overview of Swiggy's Upcoming IPO

Swiggy's IPO will feature a fresh equity issue of Rs 3,750 crore, along with an offer-for-sale (OFS) of 18.52 crore shares owned by current shareholders, as outlined in its updated draft red herring prospectus-I (UDRHP-I). The company is also exploring a pre-IPO funding round, which may affect the size of the new equity issuance based on the amount raised.