Ahead of the IPO launch, Swiggy CEO Sriharsha Majety said on Wednesday that his company doesn’t expect much competition from D-Mart, despite both operating in the grocery segment. He said the value proposition of both companies is very different as D-Mart focuses on value-driven offerings, while Swiggy’s Instamart is around convenience and even the consumer base is a bit different.
Swiggy’s quick commerce arm has now reached 40 per cent of its food delivery business and this is expected to beat the food delivery business in the coming time, said Rahul Bothra, CFO at Swiggy, while speaking at a conference ahead of the IPO launch on November 6.
Bothra said the company’s quick commerce is expanding at a faster rate than the food delivery business and the growth on the platform is expected to come from the growing Gen-Z population who are willing to pay more for convenience.
Swiggy plans to allocate Rs 1,179 crore into Swiggy Instamart, an increase from Rs 982 crore mentioned in its recently filed red herring prospectus. As per Rahul Bothra, the company plans to allocate roughly 30% of its IPO collection to expand the dark store network.
The Bengaluru-headquartered firm has planned to invest Rs 755.4 crore to expand its dark store network, with an additional Rs 423.3 crore for lease and licensing payments for these stores or warehouses.
In the quick commerce business, the company is testing new ground, it has its presence in 30 plus cities and it plans to continue to expand it. As of June 30, Swiggy Instamart operates approximately 557 dark stores and plans to increase this number to 741 up from the previously projected 538.
In terms of geographic expansion for food delivery, the company is already in 650 plus cities and here room for growth for geographic expansion is lesser than the user base.
Swiggy IPO’s price band is set at Rs 371 to Rs 390 per share. The minimum lot size for an application is 38 Shares. The minimum amount of investment required by retail investors is Rs 14,820.
The IPO of India’s second-largest food delivery platform combines a fresh equity issuance of Rs 4,499 crore with an offer-for-sale (OFS) of 17.5 crore shares by existing shareholders, according to the RHP.
The company, which has raised $3.3 billion till now, has reserved 7,50, 000 equity shares worth Rs 29.25 crore for the eligible employees. It has reserved 75 per cent of the net for the qualified institutional bidders (QIBs), while non-institutional investors (NIIs) will get 15 per cent of the net offer. The remaining 10 per cent of the net offer shall be allocated towards the retail investors.
