Prosus, Swiggy’s major shareholder, may gain promoter status in the IPO. Prosus, the Dutch-listed investment arm of South African conglomerate Naspers, is aiming to reduce its 33% holding in Swiggy to below 26%. However, talks on stake reduction have faced hurdles.
As per Indian regulations, a 26% or more stake designates a promoter, subjecting them to post-IPO share sale restrictions. Swiggy’s anticipated $1 billion IPO is set to feature a $600 million offer-for-sale by existing investors.
In October 2023, US asset manager Invesco increased Swiggy’s valuation to $8.3 billion from $7.85 billion, valuing its two percent stake at $147.6 million. Swiggy, based in Bengaluru, eyes an IPO listing between July and September, with a profitable food delivery business. Yet, its grocery service, Instamart, remains incurring losses.
Swiggy’s market share in H1 2023 stood at 46%, with Zomato being its primary competitor. Zomato’s July 2021 IPO, launched at Rs 72-76 per share, received a robust investor response. “In the first half of 2023, Swiggy and Zomato dominated the market share.”
