Swiggy, on Wednesday, raised Rs 10,000 crore via qualified institutional placement (QIP) of about 26.67 crore equity shares at an issue price of Rs 375 apiece, which was at a discount of nearly 4% to the floor price of Rs 390.51 a share, sources familiar with the matter told FE.
The QIP, which kicked off on Tuesday, was oversubscribed 4.5 times, indicating strong investor appetite for the food and grocery delivery platform’s equity despite elevated cash burn levels.
Investor Confidence and Strategic Allocation
Of the total proceeds from the QIP, Rs 4,475 crore will be directed towards scaling up quick commerce infrastructure, while the remaining corpus will be allocated to technology and cloud infrastructure upgrades, brand marketing initiatives, and potential acquisitions.
At a price of Rs 375 per share, the issue was priced nearly 5.8% below Tuesday’s closing price of Rs 397.95 on the BSE, and about 3.8% below the company’s IPO price of Rs 390.
The fundraising comes amid intensifying competition, and continued cash burn in India’s quick commerce sector, with Swiggy’s Instamart looking to narrow the gap with market leader Blinkit.
Quick Commerce Cash War Intensifies
For the September quarter, Swiggy’s consolidated cash burn stood at Rs 740 crore, higher than Zomato’s Rs 543 crore. With the QIP proceeds and an anticipated Rs 2,400 crore from divesting its stake in Rapido, Swiggy’s cash reserves are expected to touch around Rs 17,000 crore, positioning it closer to Zomato’s Rs 18,000 crore war chest as of September 30. Meanwhile, Zepto which is currently preparing for an IPO after raising $450 million last month claimed to have a cash reserve of Rs 7,000 crore.