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Swiggy’s IPO: A Bold Bet on India’s Expanding Hyperlocal Commerce

Published 08-11-2024, 09:28 am

Swiggy Ltd., a leading player in India’s hyperlocal commerce, is making strides with a diverse range of on-demand services, all accessible via a single, user-friendly app. Founded in 2014, Swiggy offers services across food delivery, grocery shopping (Instamart), event booking (SteppinOut), and more. It has established itself as a recognized innovator, with the RedSeer Report (2024) identifying Swiggy as synonymous with hyperlocal convenience and a leader in this burgeoning industry.

The app includes a suite of integrated services: Swiggy Genie for parcel pick-ups, Dineout for restaurant reservations, and Swiggy Minis for various hyperlocal needs. Swiggy also offers a loyalty program, "Swiggy One," which provides discounts, and in-app payment solutions like Swiggy Money and Swiggy UPI. Swiggy’s approach extends beyond customers to support its restaurant and merchant partners with tools for growth, logistics, and a seamless last-mile delivery network.

Swiggy’s unified app model, the only one of its kind in India, allows it to cater to urban consumers’ needs across ordering, dining out, and at-home cooking. This model supports organic growth, leveraging a shared user base, a broad partner network, and a single tech stack, which enables Swiggy to quickly introduce and scale new services. As of June 2024, Swiggy is ranked as India’s most valuable Consumer Technology & Services Platform by Kantar BrandZ and one of the nation’s top 25 brands overall.

Financially, Swiggy’s food delivery business has turned profitable, while other segments are still progressing toward profitability. The upcoming IPO, with shares priced between INR 371 and INR 390, aims to raise approximately INR 11,327.43 crore. Of this, fresh equity shares will generate around INR 4,499 crore, designated for debt reduction, expanding Instamart's dark stores, investing in technology and brand marketing, and potential acquisitions.

Despite its strong brand and innovative approach, Swiggy has posted losses for the last three years. Yet, with a strategic infusion of IPO funds, management is optimistic about achieving profitability across segments. This IPO, which includes allocations for institutional and retail investors, offers an opportunity for risk-tolerant, cash-rich investors to participate in Swiggy’s growth story.

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