Reports indicate that foodtech giant Swiggy is contemplating a debut on the stock market in 2024. The company has initiated discussions with bankers to assess its valuation for the potential IPO. This decision follows a pause in the process due to unfavorable market conditions, as reported by Reuters.
Market Conditions Impacting Swiggy Plans
Last year, Swiggy embarked on preparations for its initial public offering (IPO), with plans to list in 2023. However, global market challenges, including the devaluation of tech startups, prompted the company to postpone its IPO strategy temporarily.
Swiggy Resumption of IPO Preparations
The revival of global and Indian markets appears to have encouraged Swiggy to re-engage with its IPO preparations. Swiggy has approached eight investment banks, such as Morgan Stanley, JP Morgan, and Bank of America, to propose collaboration on the IPO project.
Valuation and Listing Window
Swiggy is using its previous funding round’s valuation of $10.7 billion as a reference point for its IPO planning. Nevertheless, the company has yet to finalize decisions regarding the stake sale and ultimate valuation. The anticipated timeframe for the IPO listing window is between July and September 2024.
Financial Snapshot and Zomato’s Rivalry
In FY22, Swiggy recorded a consolidated loss of INR 3,629 crore and generated a revenue of INR 5,704.9 crore, with a significant portion attributed to the food delivery business. Conversely, rival company Zomato achieved profitability in the first quarter of FY24, posting a consolidated profit after tax (PAT) of INR 2 crore, compared to a net loss of INR 186 crore in the corresponding quarter of the previous fiscal year. This development has propelled Zomato’s shares to rise by over 50% year to date, a trend reflecting the improvement in market sentiment and the favorable financial performance of its competitor.
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