Food tech major Swiggy has received shareholder approval to increase the primary issue size of its Initial Public Offering (IPO) from Rs 3,750 crore to Rs 5,000 crore at an Extraordinary General Meeting (EGM) held on October 3.
The company has created a provision for the larger IPO, allowing for an additional Rs 1,250 crore if further funding is required. Notably, the offer for sale (OFS) component remains unchanged at Rs 6,664 crore.
Anticipated Large Public Market Debut
Media reports had indicated on September 10 that Swiggy was planning to increase its IPO size. The Bengaluru-based company’s public market debut is anticipated to be one of the largest new-age IPOs in India, with an overall size potentially reaching Rs 10,414 crore ($1.25 billion) or Rs 11,664 crore ($1.4 billion) if the IPO size is further increased.
Competitive Pressures in the Food Tech Sector
The decision to upsize the IPO comes as Swiggy faces intense competition from other profitable new-age companies, including Zomato, Zomato-owned Blinkit, Flipkart Minutes, and Tata BigBasket. Swiggy is preparing for its IPO later this year and has been gearing up for its public market debut for several months.
Revenue Growth and Narrowing Losses in FY24
In FY24, Swiggy reported a narrowing of losses alongside a significant increase in revenue, thus reducing the gap with its arch-rival Zomato. The company’s revenue grew by 36%, rising from Rs 8,265 crore in FY23 to Rs 11,247 crore in FY24.
During the same period, Swiggy’s losses decreased by 44%, from Rs 4,179 crore to Rs 2,350 crore, aided by stronger expense control.
Q1 FY25: Widening Losses Amid Growth Prioritization
In comparison, Gurugram-based Zomato generated a revenue of Rs 12,114 crore and a profit of Rs 351 crore in FY24. However, in Q1 FY25, Swiggy prioritized growth, resulting in a widening of losses.
The company reported an 8% increase in losses, amounting to Rs 611 crore in Q1 FY25, up from Rs 564 crore in the same quarter a year ago, driven by mounting expenses, according to the company’s updated draft red herring prospectus (DRHP).
Swiggy Q1 Expenses and Revenue
Swiggy’s expenses in Q1 FY25 totaled Rs 3,908 crore, reflecting a 27% rise from Rs 3,073 crore during the same period in the previous fiscal year. The company’s revenue from operations stood at Rs 3,222.2 crore in the April-June period of the current fiscal year, marking a 35% increase from Rs 2,389.8 crore recorded in the corresponding period last year.