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IPO-bound Swiggy converts itself into a public entity

EntrackrEntrackr · 1y ago
IPO-bound Swiggy converts itself into a public entity
Medial

Foodtech and quick commerce decacorn Swiggy has converted into a public entity, as per the resolution passed by the board of directors of the company with the Registrar of Companies. This marks the company’s concrete step towards a definitive IPO plan in the second half of this year. The name of the holding company has been changed from Swiggy Private Limited to Swiggy Limited. In February, Bundl Technologies Private Limited changed its name to Swiggy Private Limited. The company said that will help it to establish greater proximity and identification of the company’s corporate name with the company’s core brand. Swiggy has been readying itself for public listing for quite some time and the Bengaluru-based firm may file IPO papers soon. As per media reports, the company will seek a valuation in the range of $12-15 billion. The firm recently appointed Suparna Mitra as an independent director to its board. While Swiggy claimed that its food delivery business turned profitable as of March 2023, the firm reported Rs 4,179 crore in overall loss during FY23. Moreover, the company booked Rs 5,476 crore in revenue from operations during the first three quarters of the financial year FY24 and recorded $200 million (approximately Rs 1,600 crore) loss for the nine months. Entrackr had exclusively reported about Swiggy’s financial three quarters (FY24) numbers in the last week of March. Last month, US-based asset management firm Baron Capital marked up the valuation of Swiggy to $12.1 billion up from $10.7 billion during the last fundraise in January 2022. It’s one of the few IPO-bound companies that saw back to back valuation markup by early investors.

IPO Prep: Swiggy paints a healthy financial picture in first 9 months of FY24

EntrackrEntrackr · 1y ago
IPO Prep: Swiggy paints a healthy financial picture in first 9 months of FY24
Medial

A decade after launching, foodtech and quick commerce decacorn Swiggy is eyeing a public listing this year and is leaving no stone unturned to present a healthy financial picture. The company seems to be achieving a steady 25-30% year-on-year growth in the ongoing fiscal year (FY24). During the first nine months of FY24, IPO-bound Swiggy’s revenue from operations was Rs 5,476 crore, according to a document drafted by an investment banker on behalf of Swiggy. While the company reported Rs 8,265 crore in revenue in FY23, the document revealed it did a collection of Rs 6,623 crore in the last fiscal year, it appears Swiggy changed its revenue recognition method. Within this, the food delivery business constituted 82.65% of the total operating revenue, amounting to Rs 4,526 crore. The remaining income came from Swiggy Instamart, the firm’s quick commerce vertical. Sources indicate that the company is exploring a secondary market deal as it wants to offer exits to its early as well as late-stage backers. “Swiggy is likely to go for an IPO in the second half of this year and the secondary transaction appears to be an attempt to spruce up its cap table,” said one of the sources requesting anonymity. Sources outline that Swiggy will be seeking its last primary valuation in the potential secondary transaction. “The company closed Rs 384 crore from Ramco Group in August at a valuation of Rs 73,520 crore [$8.85 billion],” mentioned the document, cited above. Just months after this funding, US-based assets manager Baron Capital Group marked up the valuation of Swiggy to $12.1 billion. It’s worth noting that Swiggy acquired Lynk Logistics around the same time (August 2023) and the above transaction might be linked to it. Queries sent to Swiggy didn’t elicit any response. The document further stated that during the first nine months of FY24, Swiggy’s gross order value (GOV) stood at Rs 24,230 crore, with food delivery comprising a substantial 76.2%, equivalent to Rs 18,472 crore. The remaining GOV is attributed to Instamart. With a sharp focus on profitability, the Bengaluru-based company has significantly improved its EBITDA margins which registered at -1.9% and -109.5% for the food delivery biz and Instamart, respectively during the nine-month period. These figures stood at -17.5% and -259% in FY23. Swiggy’s cost-cutting measures and IPO preparations have been evident. In January, Entrackr reported that Swiggy was planning to lay off 6% of their workforce to trim expenses. In February month, the company changed its registered name from Bundl to Swiggy and recently shortlisted seven bankers including Kotak Mahindra and JP Morgan. “Swiggy will file papers for IPO by May and ultimately go IPO around the festive season. The company will seek valuation in the range of $12-15 billion,” said another source who also requested anonymity. This person also said that the firm may give a discount in valuation as far as secondary transaction is concerned. The timing seems good, with closest peer Zomato doing well since its listing to approach a $20 billion valuation this week. Even after factoring in the lead for Zomato in topline, a $12 billion valuation or even higher should not be out of reach for Swiggy after it files its FY24 financials. However, it is clear that factors like market dynamics at the time of the IPO, the share of offer for sale versus funds for the firm, or the plans of Big Basket or even Zepto will likely impact perceptions on future profitability. Even as Zomato has achieved operational profitability, Swiggy was some way off when it last announced numbers, and that red ink is bound to weigh heavily on its price unless a turnaround is visible and sustained.

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