Swiggy gig workers listen to a briefing during a promotional event in Mumbai.
Credit: Reuters Photo
Bengaluru: Loss-making Bengaluru-based food and grocery delivery platform Swiggy, is looking to leverage its early bird status in the booming quick commerce market, investing a sizeable part of its Rs 11,300 crore initial public offer (IPO) in deepening the presence of its dark stores to galvanise its delivery timelines further.
Swiggy intends to direct Rs 7,554 crore into dark stores expansion for its quick commerce segment, while Rs 4,233 crore will go into leasing and licensing these facilities, its red herring prospectus (RHP) showed. “Our number of dark stores has increased by more than double, across 605 as of September and will continue to increase,” said chief financial officer Rahul Bothra said in a press briefing on Monday.
With its price band set between Rs 371 to 390, the IPO will have a primary offer size is of Rs 4500 crores, including Rs 27 crores reserved for employees at the upper price band.
While the IPO will open on Wednesday, anchor investor bidding will open a day earlier (today). Investors can bid for a minimum of 38 equity shares and in multiples of 38 shares thereafter.
As mentioned, the funds raised will essentially be deployed to give Swiggy an added edge in the sector they are playing in. “I think we're really in the first few minutes of the game here in quick commerce and consumer preferences, needs and wants are getting developed, emerging as we speak. Hence, we have much to play for as we go into the next phase of quick commerce,” said chief executive officer Sriharsha Majety.
Swiggy will also use the IPO proceeds to invest in its technology and cloud infrastructure. It may be recalled that the delivery platform offers various services like dineout, food and grocery delivery as well as pick up and drop facility in one app, as opposed to its peer Zomato whose various offerings come in standalone apps. This acts as an added advantage as it offers convenience to users.
“The number of users who have used more than one service has doubled over the last two years. We have a very robust user base who is starting to engage with us a lot more often and spending the overall basket of consumption on our platform,” added Bothra.