Swiggy IPO plans unveiled: Will it take a bigger bite of Zomato’s pie? A closer look at food-tech’s financials

Swiggy IPO: Swiggy, one of India's largest food delivery platforms, filed its updated Draft Red Herring Prospectus (DRHP) with the Securities and Exchange Board of India (SEBI) on September 26 as it gears up for a major initial public offering (IPO). The Bengaluru-based company plans to raise ₹3,750 crore ($448.56 million) through the IPO. The move sets the stage for an exciting public showdown with its arch-rival, Zomato, as both companies battle for dominance in India’s fast-growing food and quick-commerce markets.

Swiggy’s financial performance in FY24

Swiggy’s updated DRHP revealed significant financial improvements in FY24. The company managed to reduce its losses by 43 per cent, bringing them down to ₹2,350 crore. This was primarily driven by its rapid growth in both food delivery and its Instamart quick-commerce arm. Revenue saw a notable 36 per cent increase, hitting ₹11,247 crore, compared to ₹8,264 crore in FY23.

Its consumer-facing business, including food delivery, dining, and Instamart, reported a gross order value (GOV) of ₹35,000 crore, boosted by 14.3 million active monthly users. Quick commerce alone contributed ₹374 crore in revenue for the first quarter of FY25, illustrating Swiggy’s expanding influence beyond food delivery.

Zomato’s lead – but for how long?

While Swiggy’s numbers are impressive, it still has ground to cover against Zomato, which currently holds a stronger market position. In its Q1 FY25 financial results, Zomato reported revenue from operations at ₹4,206 crore, an 18.1 per cent increase from ₹3,562 crore in Q4 FY24. Unlike Swiggy, Zomato is already profitable, reporting ₹253 crore in net profits for the quarter, a sharp 44.6 per cent rise compared to the previous quarter.

Zomato’s market capitalization is nearly $25 billion, more than double Swiggy's projected valuation. Zomato’s food delivery service contributed 46.17 per cent of its total revenues, with additional income streams coming from its B2B Hyperpure and Blinkit quick-commerce verticals.  The company’s strong profit growth, strategic investments, and employee rewards have allowed it to maintain its lead in the market.

Investors, stakeholders: Swiggy’s big names

Several high-profile investors will also reduce their stakes in Swiggy’s IPO. Prosus, which holds a 32 per cent share in the company, plans to offload a substantial portion of its holdings. Other major investors like SoftBank, Accel, and Tencent will also reduce their stakes. The proceeds from the IPO will primarily be used to expand Swiggy’s quick-commerce operations and improve its technological infrastructure.

What’s next?

Swiggy’s IPO comes at a time when Zomato is riding high after a successful public debut. Zomato’s shares opened at ₹115, up 51 per cent from its initial price band, and its current stock is valued at ₹237.9, making co-founder Deepinder Goyal a billionaire.

Swiggy's public offering, expected to be one of the biggest in 2024, will mark a new phase in the intense competition between these two food-tech giants. With Swiggy narrowing its losses and expanding aggressively into new verticals, the IPO could provide the momentum it needs to close the gap with Zomato. However, with Zomato’s current profitability and market size, it remains to be seen whether Swiggy can catch up in this high-stakes battle.