In today’s fast-paced world, convenience is king. Online food and grocery delivery businesses have transformed how people shop and eat. With just a few clicks, customers can enjoy their favorite meals or stock their kitchens without stepping outside. This expanding industry depends on the increased desire for quick and easy solutions.

As urban lifestyles change, more consumers seek dependable services that can accommodate their hectic schedules. The range of cuisines and goods offered further heightens the attractiveness. Overall, this sector not only covers daily requirements but also reshapes culinary habits and buying preferences, opening up new potential for both enterprises and customers alike.

In this one company that might be listing itself going forward is Swiggy. In this article we will go through the relevant and crucial information one must know before applying for the Swiggy IPO.

Industry Outlook

The online food delivery landscape is rapidly evolving, captivating consumers with its convenience and variety. As lifestyles become busier, more people are turning to these services for quick meal solutions. This shift highlights a growing trend where convenience meets culinary diversity, reshaping how individuals access food.

By the end of 2024, the online meal delivery sector is projected to reach $1.2 trillion in revenue. It is expected to grow at a compound annual rate of 9.04% over the next five years, pushing the market volume to $1.85 trillion by 2029.

In India, the Grocery Delivery market will surge by 30.7% in 2025, hitting a volume of $0.77 trillion in 2024. The average revenue per user in this sector will amount to $496 annually.

User penetration is forecasted to be 26.6% in 2024. The increasing demand for convenience and a wide variety of cuisines significantly boost India’s online food delivery market, making it appealing for investors and entrepreneurs. Urban lifestyles and technological advancements further drive this growth, creating exciting opportunities for businesses in this vibrant industry.

Company Overview Of Swiggy

Swiggy is one of India’s leading food delivery platforms. It was founded in 2014. The company’s headquarters are located in Bangalore, India. Swiggy connects millions of users with local restaurants. It has more than 380,000 delivery partners across the country. These partners ensure fast and reliable delivery.

Over 200,000 restaurants collaborate with Swiggy. This allows for a wide variety of cuisines and options for customers. Swiggy operates in over 650 cities in India. The platform has processed more than 3 billion orders. Its user-friendly app and efficient service make it popular among food lovers. The company continues to multiply, meeting the evolving demands of consumers.

Swiggy offers a variety of services catering to different customer needs:

Swiggy Food: The primary service allows users to explore numerous restaurant listings, browse menus, and place orders easily via the mobile app or website. Restaurant partners prepare the food, and Swiggy’s vast delivery network ensures prompt deliveries to customers.

Swiggy DineOut: enhances the dining-out experience. Users can discover restaurants, view menus, make reservations, and even enjoy attractive discounts. The platform also allows for seamless digital payments, making dining more convenient.

Swiggy Instamart: For grocery shopping, Swiggy Instamart allows users to browse and purchase a wide range of groceries and household items. These orders are processed through Swiggy’s dark stores and delivered quickly by their reliable delivery partners.

Swiggy Genie: offers a convenient pick-up and drop-off service for users. Customers can send items from one point to another within the same city, making it ideal for sending packages, documents, or personal items.

Swiggy Minis: supports local brands by providing a platform where they can set up mini storefronts. Swiggy facilitates logistics, payment processing, and order management, helping small businesses reach more customers effectively.

Acquisition

In 2022 Swiggy made a major acquisition in the dine-out space. The company went ahead and acquired the dine-out startup from Times Internet for ₹960 crore. This acquisition helped Swiggy a great deal in entering the dine-out space and also provided it with the opportunity to compete with its arch-rival Zomato.

Financial Highlights Of Swiggy

The company has shown significant revenue growth over recent years. Its revenue increased from ₹2,547 crore in March 2021 to ₹11,247 crore in March 2024. This steady rise reflects its improving market position and operational scale. However, despite the revenue surge, the company is still facing net losses, though these losses have been narrowing. The net loss improved from ₹4,179 crore in March 2023 to ₹2,350 crore in March 2024.

The company’s EBITDA has seen negative figures, although it has improved. In March 2021, EBITDA was -₹1,348 crore, worsening to -₹4,276 crore in March 2023, but recovering to -₹2,208 crore in March 2024. The EBITDA margin also reflects this trend. It improved from a low of -64% in March 2022 to -20% in March 2024, indicating a slow return to operational efficiency.

Additionally, earnings per share have followed a positive trajectory. EPS improved from -₹18,168 in March 2021 to -₹0.15 in March 2024. This improvement signifies a potential turnaround as the company reduces its losses and continues to grow its revenue.

Order Value

Swiggy’s gross order value (GOV) surpassed $4.2 billion (35,148 crores) while, the site gained 1.43 crores monthly transacting users (MTUs), which is an impressive result. In comparison, Zomato’s GOV was $5.85 billion (48,952 crores), with 1.9 crores MTUs. Swiggy’s food delivery business recorded an average order value (AOV) of ₹428 in FY24 as compared to Blinkit’s AOV of ₹617. 

The increase in food delivery orders is critical to Swiggy’s road to profitability. The company also established a platform fee of ₹6 per order to increase revenue. 

There are reports that Swiggy is planning to raise around ₹11,000 crore through a potential public offering. Interestingly, the estimated proceeds align with Swiggy’s revenue for FY23. The company is expected to surpass its previous revenue records in FY24, demonstrating strong growth and solidifying its financial outlook for the coming year.

Shareholding Pattern

Prosus, a Dutch-listed company, is Swiggy’s largest investor with a 33 percent ownership. SoftBank is closely behind, with Elevation Capital, Tencent, and Accel as other shareholders. Other investors include Meituan, Alpha Wave Global, DST Global, Qatar Investment Authority, and Coatue. GIC, Hillhouse Capital Group, and Invesco also make contributions.

Swiggy’s co-founders, Rahul Jaimini, Nandan Reddy, and Sriharsha Majety, hold 4.2%, 1.6%, and 1.2% of the business, respectively, according to Tracxn. According to ET, Jaimini left his operational position in 2020 to focus on his new venture, Pesto Tech.

Competitors

Zomato and Swiggy compete fiercely in India’s food delivery market. Both offer diverse restaurant options and fast delivery, striving to attract customers with discounts and features. Below is a brief comparison of both companies’ FY23 and FY24 results.

Revenue Comparison

Swiggy’s revenue increased from ₹8,265 crore in FY23 to ₹11,247 crore in FY24. Zomato, on the other hand, saw a significant rise from ₹7,079 crore in FY23 to ₹12,114 crore in FY24, surpassing Swiggy’s growth.

Net Profit Comparison

Swiggy’s net loss improved, shrinking from -₹4,179 crore in FY23 to -₹2,350 crore in FY24. In contrast, Zomato moved from a net loss of -₹971 crore in FY23 to a net profit of ₹351 crore in FY24, marking a successful turnaround.

EBITDA Comparison

Swiggy’s EBITDA improved from -₹4,276 crore in FY23 to -₹2,208 crore in FY24. Zomato, however, achieved positive EBITDA, moving from -₹1,211 crore in FY23 to ₹43 crore in FY24, reflecting better operational efficiency.

EBITDA Margin Comparison

Swiggy’s EBITDA margin rose from -52% in FY23 to -20% in FY24. Zomato saw a greater improvement, shifting from -17% in FY23 to break even at 0% in FY24, signaling operational stabilization.

Earnings per Share Comparison

Swiggy’s earnings per share improved from -₹2.68 in FY23 to -₹0.15 in FY24. Zomato outperformed, increasing its EPS from -₹1.2 in FY23 to ₹0.4 in FY24, reflecting better shareholder returns.

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IPO Buzz

The food delivery platform Swiggy is generating significant buzz as it prepares for its initial public offering (IPO). The company’s shares have seen a remarkable surge in the unlisted market, jumping nearly 40% in just two months to around Rs 490. This spike has boosted Swiggy’s market value from Rs 70,000 crore to Rs 1.16 lakh crore in the same period. The current lot size for Swiggy shares in the unlisted market is approximately 100.

Several high-profile individuals have reportedly acquired pre-IPO shares of Swiggy. Notable names include cricketer Rahul Dravid, actor Amitabh Bachchan, and filmmaker Karan Johar. Their involvement has added to the growing interest in the company’s shares ahead of the anticipated November IPO.

Swiggy aims to raise a substantial sum through its public offering. The Bengaluru-based company plans to garner around Rs 11,000 crore from the IPO. This figure includes a fresh equity sale of Rs 3,750 crore and an offer-for-sale (OFS) component that could reach Rs 6,664 crore. The company’s financial performance has been improving, with operating revenue increasing by 36% to Rs 11,247 crore and net losses decreasing by 44% to Rs 2,350 crore for fiscal year 2024.

Conclusion 

Swiggy’s upcoming IPO is generating excitement in the market. The company has shown strong revenue growth and reduced losses. Its share price in the unlisted market has surged significantly. High-profile individuals have invested in pre-IPO shares. Swiggy plans to raise a substantial amount through its public offering.

However, it faces stiff competition from Zomato, which has already achieved profitability. The food delivery sector in India continues to expand rapidly. Swiggy’s IPO could be a significant event for investors interested in this growing industry. Questions for readers: How might Swiggy’s IPO impact the competitive landscape of food delivery in India? What strategies could Swiggy employ to achieve profitability like its rival Zomato? Comment below.

Written By Dipangshu Kundu

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