Swiggy shareholders approve $1.25 bn fundraising via IPO

Food tech major Swiggy has received shareholders' approval to launch its $1.25 billion initial public offering (IPO). The Bengaluru-based decacorn, in its regulatory filing with the finance ministry's Registrar of Companies, says it has passed a special resolution to raise ₹3,750 crore by way of a fresh issue of equity shares and up to ₹6,664 crore via an offer for sale (OFS) by existing shareholders.

The offer also includes a green shoe option, if required, and the board may also invite existing shareholders to take part in the offer. Further, the company may also raise about ₹750 crore via a pre-placement offer from anchor investors.

The special resolution was passed at an EGM (extraordinary general meeting) of its shareholders on April 23, 2024.

“The consent and approval of the shareholders of the company be and is hereby according to create, issue, offer, allot and/or transfer of its equity shares up to an aggregate of Rs 37,501 million by way of a fresh issue of equity shares (the fresh issue) and an offer for sale of such number of equity shares up to an aggregate amount of Rs 66,640 million by certain existing shareholders (selling shareholders, OFS and fresh issue),” Swiggy's RoC filing shows.

The company also proposed to increase the investment limit by foreign institutional investors, NRIs, and overseas citizens of India from 10% to 24%.

The filing adds the company board has also approved the appointment of founder Sriharsha Majety as an executive director, designated as MD and group CEO, for five years, with effect from April 1, 2024. His remuneration for the financial year FY25 and FY26 stands at ₹2.5 crore and ₹3 crore, respectively. The company board also approved the appointment of Lakshmi Nandan Reddy Obul as an executive director, whole-time director and head of innovation.

Swiggy is among a series of new-age companies including Ola Electric, Awfis, and Firstcry planning to raise funds via IPO this year.

Swiggy's revenue from operations for the financial year 2022-23 stood at ₹8,264.6 crore, up from ₹5,704.9 crore in the previous fiscal year. The net loss surged to ₹4,179 crore in 2022-23 against ₹3,627 crore in 2021-22.

In the run-up to the initial public offer (IPO), the food delivery behemoth, backed by global tech investors Prosus and Softbank, reduced its workforce by 6% in January 2024. This was a direct result of pressure to become profitable.

Swiggy has largely achieved stability in its food delivery business but continues to burn cash due to the rapidly expanding grocery service Instamart. Last May, Swiggy’s co-founder and group chief executive, Majety, announced the company’s core food delivery business had achieved profitability in March.

Swiggy's rival Zomato had gone public in July 2021 and had raised $1.2 billion via the public offer.