Ahead of the opening of the initial public offering (IPO), Swiggy has raised ₹5,085 crore from anchor investors, which saw participation from marquee investors such as BlackRock, Fidelity, Nomura, BNP Paribas, and Allianz Global. The food delivery company allocated 13,03,85,211 equity shares to over 75 anchor investors at the upper end of the IPO price band of ₹390 per share.
As per the exchange filing, 56% of the anchor book was allocated to domestic institutional investors, with 8 out of top 10 mutual funds participating in the issue, including SBI MF, ICICI Prudential MF, Kotak MF, Mirae MF, Nippon MF. The issue also garnered wide interest from the top domestic insurance companies such as ICICI Pru Life, HDFC Life, SBI Life, and others.
"Out of the total allocation of 13.03 crore equity shares to the anchor investors, 5.3 crore shares were allocated to 19 domestic mutual funds, which have applied through a total of 69 schemes," Swiggy said in the exchange filing.
The anchor book also saw participation from the global investors such as Nomura, Government Pension Fund Global, New World Fund, Fidelity, Omnis Portfolio Investments, PGGM World Equity, Blackrock, Carmignac, Eastspring Investments, Citigroup, TOCU Europe, Integrated Core Strategies, CLSA, Matthews Asia Funds, and Societe Generale.
Established in 2014 by Sriharsha Majety and Lakshmi Nandan Reddy Obul, the online food ordering and delivery company looks to raise ₹11,300 crore at a price band of ₹371-390 per share. This is the second biggest IPO in the current year after Hyundai Motor India’s ₹27,856-crore public offering.
The market capitalisation of the new age technology company is estimated to be around ₹87,299 crore.
The three-day IPO of the foodtech company will open for subscription today, while the stock is likely to make its debut on the BSE and NSE on November 13, 2024.
As per the red herring prospectus (RHP) filed with the SEBI, the company, a close competitor of Zomato, intends to use capital raised from fresh equities to investment in its material subsidiary, Scootsy, for repayment of certain borrowings availed by the company and expansion of its dark store network for quick commerce segment. A pat of the capital will be invested in technology and cloud infrastructure; brand marketing and business promotion expenses; and funding inorganic opportunities. The fund will be also used to meet general corporate purposes.
Out of ₹4,500 crore from fresh equity issuance, Swiggy proposes to invest ₹1,178.70 crore for the expansion of its dark store network for the quick commerce business. The company will use ₹755.4 crore to set up additional dark stores and ₹423.3 crore to make lease and license payments of all the dark stores for fiscals 2025, 2026, 2027 and 2028. The food delivery company plans to open around 741 dark stores measuring an aggregate of approximately 2.59 million square feet.
The company started quick commerce business in 2020 in some of the cities where its food delivery business was established. As of June 30, 2024, it run a total of 581 open dark stores spread across 32 cities in the northern, western, eastern and southern regions of India. “Our Dark Store infrastructure has grown significantly over time, from 12 Dark Stores as on April 1, 2021, to 581 Dark Stores as on June 30, 2024. As on June 30, 2024, the size of our Dark Stores ranges from 1,400 square feet in Sector 46, Noida to 10,810 square feet in Garudacharpalya, Bengaluru, with an average area of 3,006 square feet per Dark Store,” the RHP highlighted.
Besides, ₹164.8 crore will be used for repaying debts of its subsidiary, Scootsy, which is the authorised distributor of various leading brands in India for wholesalers and retailers. As of September 30, 2024, Scootsy had outstanding loan of ₹223.81 crore.
The repayment of the borrowing will help in improving the debt-equity ratio, which will allow the company to raise additional capital in the future to fund potential business development opportunities, Swiggy says in its RHP.
Among others, ₹703.4 crore will be used for building technology and cloud infrastructure, while ₹1,115.3 crore to be invested for brand marketing and business promotion expenses for enhancing the brand awareness and visibility of its platform, across the segments.
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