Food delivery giant Swiggy is likely to have shortlisted 7 investment banks as advisors as the Softbank-backed firm gears up to launch one of the most widely anticipated IPO’s in 2024, multiple industry sources with knowledge of the matter told Moneycontrol.
“Kotak Mahindra Capital , Citi and JP Morgan are likely to have been picked for senior roles for the deal,” one of the persons told Moneycontrol.
A second person said that Bofa Securities, Jefferies, ICICI Securities and Avendus Capital may also be part of the final IPO syndicate.
Three other persons also told Moneycontrol about the proposed list of 7 i-bankers.
All the five persons above spoke on the condition of anonymity.
We could not elicit an immediate comment from Swiggy or the i-banks. This article will be updated as soon as we hear from the parties.
On September 12, that Swiggy along with PayU had held pitches to select advisors for their respective domestic listings.
The September 12 report had added that the ballpark size of the Swiggy IPO could be in the range 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.
To be sure, these are early days for the Swiggy IPO and no final call has been taken on the quantum or timing of the IPO launch.
Further, SEBI introduced the concept of confidential filings in November 2022. Common in US markets, under this route, the issuer company is allowed to keep its offer document private by the pre-filing route until it firms up its IPO plan. The direct-to-home platform, Tata Play (formerly Tata Sky), is the first firm to file confidential papers with SEBI for an IPO.
In its last announced fund raise, Swiggy mopped up $700 million in January 2022 at a valuation of $10.7 billion. After two back-to-back markdowns, investor Invesco last valued Swiggy at around $5.5 billion while Baron Capital pegged it at around $7.3 billion. Alpha Wave Global, Qatar Investment Authority and Prosus are some of the other investors who have bet on Swiggy.
The current m-cap of Swiggy’s listed peer Zomato is Rs 1,08,189 crore.
Importantly, Swiggy announced that its food-delivery business turned profitable in the March quarter of FY23, after factoring in all corporate costs, excluding employee stock option (ESOP) costs.
In a blogpost on May 18, Swiggy’s Co-founder and Chief Executive Officer (CEO) Sriharsha Majety said that the company’s quick commerce segment Instamart is on track to become contribution-margin break-even in the next few weeks. This is a metric typically used by e-commerce companies to communicate the profitability of their business on a per order basis, including variable costs like logistics, but excluding fixed costs and marketing spend.