Swiggy’s largest investor, Prosus, stands to gain over $500 million from the food and grocery delivery firm’s upcoming IPO, as it plans to offload a 5% stake. This͏͏ figure͏͏ is͏͏ based͏͏ on͏͏ Swiggy’s͏͏ projected͏͏ listing͏͏ valuation͏͏ of͏͏ $11-12͏͏ billion͏͏ and͏͏ could͏͏ vary͏͏ depending͏͏ on͏͏ the͏͏ final͏͏ issue͏͏ price.
Key͏͏ Stakeholders͏͏ Join͏͏ Prosus in͏͏ Offloading͏͏ Shares:
In͏͏ addition͏͏ to͏͏ Prosus,͏͏ other͏͏ investors͏͏ such͏͏ as͏͏ Elevation͏͏ Capital,͏͏ Accel,͏͏ and͏͏ Norwest͏͏ will͏͏ also͏͏ offload͏͏ part͏͏ of͏͏ their͏͏ stake͏͏ in͏͏ the͏͏ IPO,͏͏ according͏͏ to͏͏ Swiggy’s͏͏ updated͏͏ draft͏͏ red͏͏ herring͏͏ prospectus͏͏ (DRHP)͏͏ filed͏͏ late͏͏ on͏͏ Thursday.
Continue͏͏ Exploring:͏͏ Swiggy’s͏͏ early͏͏ investors͏͏ Prosus,͏͏ Accel,͏͏ and͏͏ Elevation͏͏ Capital͏͏ set͏͏ to͏͏ sell͏͏ shares͏͏ ahead͏͏ of͏͏ IPO
Prosus͏͏ Recoups͏͏ Investment:
Prosus,͏͏ through͏͏ its͏͏ affiliate͏͏ MIH͏͏ India͏͏ Food͏͏ Holdings,͏͏ holds͏͏ a͏͏ 31%͏͏ stake͏͏ in͏͏ Swiggy.͏͏ By͏͏ selling͏͏ less͏͏ than͏͏ one-fifth͏͏ of͏͏ this͏͏ stake,͏͏ it͏͏ is͏͏ expected͏͏ to͏͏ recover͏͏ over͏͏ half͏͏ of͏͏ its͏͏ total͏͏ $1͏͏ billion͏͏ investment,͏͏ made͏͏ across͏͏ multiple͏͏ funding͏͏ rounds.
Potential͏͏ Stake͏͏ Reduction͏͏ for͏͏ Prosus:
The͏͏ sale͏͏ of͏͏ shares͏͏ and͏͏ issuance͏͏ of͏͏ fresh͏͏ equity͏͏ by͏͏ Swiggy͏͏ could͏͏ reduce͏͏ Prosus’͏͏ stake͏͏ to͏͏ below͏͏ 25%,͏͏ which͏͏ would͏͏ prevent͏͏ the͏͏ investor͏͏ from͏͏ being͏͏ classified͏͏ as͏͏ the͏͏ company’s͏͏ promoter.
According͏͏ to͏͏ the͏͏ updated͏͏ DRHP,͏͏ Swiggy’s͏͏ shareholders͏͏ will͏͏ sell͏͏ a͏͏ total͏͏ of͏͏ 185.3͏͏ million͏͏ shares,͏͏ with͏͏ Prosus͏͏ leading͏͏ the͏͏ offer͏͏ for͏͏ sale͏͏ (OFS)͏͏ by͏͏ offloading͏͏ 118.2͏͏ million͏͏ shares.
Venture͏͏ capital͏͏ firm͏͏ Accel͏͏ is͏͏ set͏͏ to͏͏ sell͏͏ 10.6͏͏ million͏͏ shares͏͏ worth͏͏ approximately͏͏ $46͏͏ million,͏͏ while͏͏ Elevation͏͏ Capital,͏͏ one͏͏ of͏͏ Swiggy’s͏͏ earliest͏͏ investors,͏͏ will͏͏ realise͏͏ around͏͏ $32͏͏ million͏͏ from͏͏ the͏͏ sale͏͏ of͏͏ 7.4͏͏ million͏͏ shares.
Accel͏͏ and͏͏ Elevation͏͏ Capital͏͏ (formerly͏͏ SAIF͏͏ Partners͏͏ India)͏͏ each͏͏ wrote͏͏ seed͏͏ funding͏͏ cheques͏͏ of͏͏ $1͏͏ million͏͏ for͏͏ Swiggy͏͏ in͏͏ January͏͏ 2015.
In͏͏ October͏͏ 2014,͏͏ when͏͏ the͏͏ term͏͏ sheets͏͏ were͏͏ signed,͏͏ Swiggy͏͏ had͏͏ partnered͏͏ with͏͏ 25͏͏ restaurants͏͏ in͏͏ Bengaluru’s͏͏ Koramangala͏͏ neighbourhood͏͏ and͏͏ was͏͏ handling͏͏ an͏͏ average͏͏ of͏͏ 35͏͏ orders͏͏ per͏͏ day.
Swiggy Founders͏͏ to͏͏ Partially͏͏ Sell͏͏ Shares:
Swiggy’s͏͏ founders,͏͏ Sriharsha͏͏ Majety,͏͏ Rahul͏͏ Jaimini,͏͏ and͏͏ Nandan͏͏ Reddy,͏͏ will͏͏ also͏͏ be͏͏ partially͏͏ selling͏͏ their͏͏ stakes͏͏ through͏͏ the͏͏ IPO.
According͏͏ to͏͏ the͏͏ prospectus,͏͏ Majety͏͏ and͏͏ Reddy͏͏ sold͏͏ shares͏͏ in͏͏ the͏͏ company͏͏ through͏͏ secondary͏͏ transactions͏͏ between͏͏ July͏͏ and͏͏ September͏͏ this͏͏ year.͏͏ Majety͏͏ offloaded͏͏ a͏͏ stake͏͏ worth͏͏ INR͏͏ 196͏͏ crore͏͏ ($23͏͏ million),͏͏ while͏͏ Reddy͏͏ sold͏͏ shares͏͏ valued͏͏ at͏͏ INR͏͏ 101͏͏ crore͏͏ ($12͏͏ million).
Currently,͏͏ Majety,͏͏ Swiggy’s͏͏ group͏͏ CEO,͏͏ holds͏͏ a͏͏ 6.23%͏͏ stake͏͏ in͏͏ the͏͏ company͏͏ and͏͏ plans͏͏ to͏͏ sell͏͏ shares͏͏ valued͏͏ at͏͏ $7.5͏͏ million.
Reddy,͏͏ the͏͏ only͏͏ executive͏͏ director͏͏ on͏͏ Swiggy’s͏͏ board͏͏ besides͏͏ Majety,͏͏ is͏͏ also͏͏ selling͏͏ shares͏͏ for͏͏ a͏͏ similar͏͏ amount.͏͏ He͏͏ currently͏͏ holds͏͏ a͏͏ 1.76%͏͏ stake͏͏ in͏͏ Swiggy.
Jaimini,͏͏ the͏͏ third͏͏ co-founder͏͏ who͏͏ left͏͏ the͏͏ company͏͏ in͏͏ 2020͏͏ but͏͏ still͏͏ holds͏͏ a͏͏ 1.14%͏͏ stake,͏͏ is͏͏ also͏͏ selling͏͏ a͏͏ portion͏͏ of͏͏ his͏͏ shares.
Targeting͏͏ $448͏͏ Million͏͏ Fundraising:
The͏͏ Bengaluru-based͏͏ company͏͏ aims͏͏ to͏͏ raise͏͏ up͏͏ to͏͏ INR͏͏ 3,750͏͏ crore,͏͏ or͏͏ approximately͏͏ $448͏͏ million,͏͏ through͏͏ a͏͏ fresh͏͏ issue͏͏ of͏͏ shares,͏͏ according͏͏ to͏͏ the͏͏ draft͏͏ papers.
Swiggy͏͏ submitted͏͏ a͏͏ confidential͏͏ DRHP͏͏ to͏͏ the͏͏ Securities͏͏ and͏͏ Exchange͏͏ Board͏͏ of͏͏ India͏͏ (Sebi)͏͏ in͏͏ April͏͏ and͏͏ received͏͏ approval͏͏ from͏͏ the͏͏ stock͏͏ market͏͏ regulator͏͏ earlier͏͏ this͏͏ week.
Continue͏͏ Exploring:͏͏ Swiggy files͏͏ updated͏͏ DRHP͏͏ with͏͏ SEBI͏͏ for͏͏ INR͏͏ 3,750͏͏ Cr͏͏ IPO
As͏͏ per͏͏ the͏͏ approval͏͏ granted͏͏ by͏͏ the͏͏ company’s͏͏ board͏͏ for͏͏ its͏͏ IPO͏͏ plan͏͏ in͏͏ April,͏͏ the͏͏ OFS͏͏ component͏͏ was͏͏ set͏͏ at͏͏ $800͏͏ million,͏͏ alongside͏͏ a͏͏ fresh͏͏ issue͏͏ of͏͏ $450͏͏ million,͏͏ bringing͏͏ the͏͏ total͏͏ issue͏͏ to͏͏ $1.25͏͏ billion.
The͏͏ amount͏͏ of͏͏ fresh͏͏ capital͏͏ being͏͏ raised͏͏ could͏͏ also͏͏ be͏͏ increased͏͏ to͏͏ $600͏͏ million,͏͏ and͏͏ the͏͏ company͏͏ has͏͏ convened͏͏ an͏͏ extraordinary͏͏ general͏͏ meeting͏͏ to͏͏ seek͏͏ shareholder͏͏ approval͏͏ for͏͏ this͏͏ change.
