Food delivery giant Swiggy is in the process of shortlisting seven investment banks to act as advisors, as the Softbank-backed firm prepares for the launch of one of the most eagerly awaited IPOs in 2024, as reported by multiple industry sources with insights into the matter.
One of the individuals revealed that Kotak Mahindra Capital, Citi, and JP Morgan are expected to have been selected for key senior roles in the deal.
Another source mentioned that Bofa Securities, Jefferies, ICICI Securities, and Avendus Capital could potentially join the eventual IPO syndicate.
Three additional individuals also disclosed details regarding the suggested roster of seven investment bankers.
The five individuals mentioned above shared this information under the condition of anonymity.
Immediate responses from Swiggy and the investment banks were not obtainable at the time of our inquiry.
On September 12, reports indicated that Swiggy, in collaboration with PayU, had conducted presentations to choose advisors for their upcoming domestic listings.
The report from September 12 also indicated that the estimated size of the Swiggy IPO might fall within the vicinity of $1 billion.
“A confidential filing of the DRHP (draft red herring prospectus) is targeted for March 2024. If all goes well and market conditions are favourable, the IPO is likely to be launched in July-August,” the report further added.
It’s important to note that the Swiggy IPO is still in its early stages, and no definitive decision has been made regarding the scale or the timing of the IPO launch.
Moreover, in November 2022, SEBI introduced the concept of confidential filings. This practice, commonly observed in US markets, enables the issuer company to maintain the confidentiality of its offer document through the pre-filing process until it finalizes its IPO strategy. Tata Play (formerly known as Tata Sky), the direct-to-home platform, became the inaugural company to submit confidential documents to SEBI for its IPO.
During its most recent disclosed funding round in January 2022, Swiggy secured $700 million at a valuation of $10.7 billion. Following two consecutive markdowns, investor Invesco appraised Swiggy at approximately $5.5 billion, while Baron Capital estimated it at around $7.3 billion. Additionally, Swiggy has received investments from entities such as Alpha Wave Global, Qatar Investment Authority, and Prosus.
The present market capitalization of Swiggy’s publicly listed counterpart, Zomato, stands at INR 1,08,189 crore.
Crucially, Swiggy disclosed that its food delivery division achieved profitability during the March quarter of FY23 when considering all corporate expenses, except for employee stock option (ESOP) costs.
Read More: Swiggy’s strategic initiatives pay off as food delivery business turns profitable
In a blog post dated May 18, Swiggy’s Co-founder and CEO, Sriharsha Majety, stated that the company’s quick commerce division, Instamart, is poised to achieve contribution-margin break-even in the coming weeks. Contribution margin break-even is a common metric utilized by e-commerce firms to indicate the profitability of their operations on a per-order basis, encompassing variable expenses like logistics while excluding fixed costs and marketing expenditures.