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In a significant development in India’s burgeoning IPO market, SoftBank-backed food delivery giant, Swiggy, has received approval from its shareholders to increase the size of its fresh issue in its upcoming IPO. The approval will allow the company to raise the fresh issue size to 50 billion rupees ($595 million), a substantial increase from the previously planned 37.5 billion rupees. This information was disclosed by individuals privy to the matter on Thursday, 10th March 2024.
The Indian IPO market has been on a tear, with approximately 250 companies raising over $9 billion so far this year. This figure is more than double the amount raised during the same period last year, according to data from the London Stock Exchange Group (LSEG). The increase in Swiggy’s fresh issue size will further boost this trend, contributing to the market’s robust growth.
Swiggy’s existing shareholders will sell shares worth 66.64 billion rupees, a figure that remains unchanged despite the increase in the fresh issue size.
Swiggy’s IPO: A New Benchmark
The increase in the fresh issue size will push the total size of Swiggy’s initial public offering to $1.4 billion, up from the previously planned $1.25 billion. This makes Swiggy’s IPO one of the largest in the country this year, surpassing NTPC Green Energy’s $1.2 billion public offering filing.
Swiggy, headquartered in Bengaluru, had filed its draft papers for the IPO last week. The company is reportedly targeting a valuation of $15 billion, a testament to its rapid growth and dominant position in India’s food delivery market. However, Swiggy did not immediately respond to a request for comment on these developments.
The company’s investment plans following the IPO are ambitious and forward-looking. A key focus area is the expansion of its quick-commerce business, ‘Instamart’.
Instamart: The Future of Quick Commerce
This service aims to deliver everything from groceries to higher-margin electronics in just 10 minutes, a feat that would revolutionize the e-commerce landscape. Swiggy’s rivals, including Zomato and Zepto, are also racing to establish their presence in this promising segment.
The shareholder approval for the upsized IPO marks a significant milestone for Swiggy. The main shareholder in the company, SoftBank, has been instrumental in supporting Swiggy’s growth and will likely play a crucial role in the IPO process. The upsized IPO, approved on Thursday, 10th March 2024, will provide Swiggy with additional resources to execute its ambitious growth plans.
Historically, the upsizing of IPOs has been a strategy employed by companies expecting strong investor demand. For instance, in 2020, Snowflake Inc., a cloud-based data warehousing startup, upsized its IPO due to overwhelming investor interest, raising $3.4 billion and marking the largest software IPO in history.
Similarly, Swiggy’s decision to upsize its IPO could be indicative of strong investor confidence in the company’s growth prospects and the overall potential of India’s digital economy.
