Should You Consider Investing in Swiggy IPO?

Founded in 2014, Swiggy Limited is a leading platform in India’s growing on-demand delivery sector. Known for its user-friendly app, Swiggy connects millions of users to a wide range of services beyond just food delivery, including grocery delivery and logistics solutions. With a commitment to convenience and innovation, Swiggy has positioned itself as a major player, particularly in India’s urban areas. Now, Swiggy is inviting investors to join its growth journey with an Initial Public Offering (IPO) opening in November 2024. This IPO consists of a book-built issue totalling ₹11,327.43 crores, including a fresh issue of ₹4,499 crore and an offer for sale worth ₹6,828.43 crores.

Swiggy Limited provides a comprehensive app-based platform that allows users to search, select, and order food, groceries, and even household goods. Orders are delivered through an expansive on-demand delivery partner network across India. The company has developed five main business units to cover a broad spectrum of services:

• Food Delivery: Swiggy’s core business remains food delivery, connecting users with a vast network of restaurants across India.
• Out-of-Home Consumption: This segment includes restaurant reservations via Swiggy’s Dineout service and event bookings through SteppinOut.
• Quick Commerce: Swiggy’s Instamart delivers groceries and essential items to customers’ doorsteps within minutes, utilising its network of dark stores.
• Supply Chain and Distribution: Swiggy’s B2B delivery services, including warehousing and logistics, cater to wholesalers and retailers.
• Platform Innovation: Additional services such as Swiggy Genie and Swiggy Minis provide options for hyperlocal deliveries, including product pickups.

Swiggy’s platform serves not only individual users but also restaurant, merchant, and brand partners, providing tools and analytics to enhance their presence on the app and improve delivery efficiencies. With over 605 dark stores operating across 43 cities (as of September 2024), Swiggy Instamart offers a selection of over 19,000 SKUs, meeting the diverse needs of its user base. The company’s commitment to maintaining high standards and providing innovative solutions makes Swiggy an attractive choice for users across India.
 

Market Position and Growth Prospects

Swiggy Limited is well-positioned in India’s growing online food and grocery delivery market. Known for its easy-to-use platform, Swiggy serves a broad customer base across food delivery, quick grocery delivery, and dining-out services. The company benefits from the rising demand for digital convenience, driven by India’s increasing internet use and urban lifestyle shifts. With expected growth rates of 17–22% in food delivery and up to 80% in quick commerce over the next five years, Swiggy is set to expand its reach and maintain its strong position as demand continues to rise.

Key Strengths and Competitive Advantages

• Swiggy has built a large and loyal customer base across India.
• The company's platform is known for its reliability and ease of use.
• Swiggy offers a diverse range of services beyond just food delivery.
• The company leverages advanced technology to personalise experiences for each user.
• Its technological capabilities help optimise and improve delivery times.
• Multiple revenue streams are generated through services like Instamart and Swiggy Mall.
• The company maintains a strong focus on customer satisfaction and service quality.
• Swiggy continues to expand into new markets and territories.
• The company holds a strong position in India's rapidly growing online food and grocery delivery market.
   

Swiggy IPO Details:

Here are the main highlights of Swiggy IPO:

• IPO Dates: November 6, 2024 – November 8, 2024
• Price Band: ₹371 – ₹390 per share
• Minimum Investment: ₹14,820 (38 shares per lot for retail investors)
• Total Issue Size: ₹11,327.43 crore (including fresh issue and offer for sale)
• Listing: The shares will be listed on BSE and NSE on November 13, 2024.

Why should you consider investing Swiggy's Initial Public Offering (IPO)?

• India’s Leading On-Demand Platform: Swiggy is recognised as one of the largest players in India’s on-demand delivery market. Starting with food delivery, Swiggy has consistently expanded its services, positioning itself as a food and quick commerce delivery leader. This reach is a significant asset as more consumers prefer digital convenience.
• Wide Product Range and Market Reach: With five distinct business units, Swiggy has built a diverse product portfolio that caters to various needs, from meals to grocery essentials. The company’s Swiggy Genie and Swiggy Minis further enable specialized local deliveries, supporting the brand’s goal of being the go-to platform for a variety of needs.
• Extensive Dark Store Network: Swiggy has established a network of dark stores across Indian cities to meet the demand for quick grocery delivery through Instamart. By utilizing dark stores, Swiggy ensures rapid deliveries and efficient inventory management, further solidifying its market presence in the quick commerce space.
• Rising Demand for Convenience and Quick Commerce: Consumers increasingly seek convenient shopping options in a fast-paced world. Swiggy’s quick commerce segment, Instamart, leverages this trend by offering fast delivery options for essential goods, groceries, and more. As demand for these services grows, Swiggy is well-positioned to capture and retain a large share of the market.
• Strong Financial Growth with Clear Path to Profitability: Swiggy’s financials highlight its growth, with revenue rising 34% between FY23 and FY24. Although the company still reports a net loss, its increased revenue and strong market presence indicate a promising pathway to profitability. The quick commerce and logistics divisions have contributed significantly to this financial growth.
• Experienced Leadership Driving Innovation: Under the leadership of seasoned experts in e-commerce, Swiggy has grown and adapted within a competitive industry. The company’s management continues to focus on product innovation and user-centric services, ensuring Swiggy’s relevance in the fast-evolving digital economy.
• Expansion Opportunities Beyond Food and Grocery: Swiggy’s established platform and service reach provide significant opportunities for expansion into new verticals. As the demand for hyperlocal services grows, Swiggy’s operational model allows it to easily integrate new offerings, like Dineout for restaurant reservations and Steppin Out for event bookings, driving more traffic to its platform.

Swiggy’s Financials Performance

Here’s a quick financial snapshot of the company's performance across key metrics such as revenue, assets, and profit after tax over recent fiscal years. The table below provides a breakdown by year.

While Swiggy continues to report a net loss, its financial growth signals a positive direction, especially in revenue and asset management. The quick commerce and logistics divisions have been key drivers of revenue growth, showing promise as core areas for Swiggy’s future financial stability.

Conclusion

Swiggy Limited has become a recognised name in India’s delivery market for food and groceries, event booking, and logistics solutions. Swiggy has built a loyal customer base and an impressive logistical network with its multi-service platform. The company’s IPO represents an opportunity to invest in one of India’s leading on-demand service providers, particularly as the convenience and quick commerce market continues to grow. Swiggy’s diverse business model, commitment to innovation, and financial growth make it a potentially valuable addition to any investment portfolio focused on India’s rapidly expanding digital economy.
 

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Investors should assess their financial goals and risk appetite before making any investment decisions.