Food and grocery delivery platform Swiggy has recently filed the Draft Red Herring Prospectus (DRHP) for its IPO. With this, the company has started preparing to compete with its competitor Zomato in the public market.

Swiggy's IPO will include a fresh issue of Rs 3,750 crore and an offer-for-sale (OFS) of more than Rs 6,500 crore. This will take the total size of the IPO to more than Rs 10,000 crore.

The company's journey
Sriharsha Majety, Nandan Reddy and Rahul Jaimini founded Swiggy in 2014. The company started with food delivery but today it is also offering hyperlocal delivery services including food and grocery, which includes quick delivery of many essential items including electronics and stationery. Over the years, it has partnered with more than 1.5 lakh restaurants across India, making it a strong foothold in major and tier-2 cities.

Grocery delivery company Instamart and new ventures have contributed significantly to Swiggy's growth. In the market, Instamart competes with BigBasket and Quick Commerce. Meanwhile, Walmart entered the rapid delivery segment through Flipkart, which further increased competition. But Swiggy's portfolio is still in line with the industry's shift towards integrated convenience services beyond food.

Financial challenges
During its journey, Swiggy has faced many challenges to achieve profitability. In FY 24, Swiggy reported a revenue of Rs 11,247 crore, an increase of 36 per cent. But the loss still stood at Rs 2,350 crore. However, this is much less than Rs 4,179 crore in FY 23.

The company is engaged in efforts to control costs and improve margins before bringing the IPO, due to which this reduction in loss has been seen. The updated DRHP shows that the latest quarterly loss has increased compared to a year ago.

On the other hand, Zomato has achieved a net profit of Rs 351 crore on revenue of Rs 12,114 crore in FY 24. The company's valuation is currently over $20 billion, with its 2021 public listing and the acquisition of quick commerce platform Blinkit contributing significantly. Swiggy has attracted not only venture capital giants but also high-profile celebrity investors for investment. Many Bollywood stars and sports personalities have acquired stakes in the non-listed company ahead of the IPO. These include Bollywood superstars Amitabh Bachchan, Madhuri Dixit and film director Karan Johar, former cricketers Rahul Dravid and Zaheer Khan, tennis star Rohan Bopanna and Innov8 founder Ritesh Malik. Meanwhile, global businesses like SoftBank Vision Fund, Prosas, Accel and Elevation Capital also have significant stakes in Swiggy. Apart from this, Motilal Oswal Financial Services Chairman Ramdev Agarwal is also one of its major shareholders. Swiggy vs Zomato As Swiggy approaches its IPO, investors will be closely watching how it competes with Zomato in India's Rs 2 lakh crore food delivery market. Both companies together have more than 90 per cent market share.