Swiggy is set to test India’s appetite for large IPOs with its upcoming public offering. The company has already secured $1.4 billion from institutional investors, including big names like Norway’s sovereign wealth fund and BlackRock. This IPO will provide a public comparable to Zomato, another major player in the Indian internet stock market.
While several Indian tech startups have gone public in recent years, the market has shown little interest in large IPOs. Companies like Nykaa and Star Health and Alliance Insurance Company are still trading well below their debut prices. On the other hand, startups that raised less than $500 million have performed exceptionally well.
India has become a hotspot for tech IPOs this year, with many eyes now on Swiggy’s IPO. Moving their headquarters back to India would allow startups to comply with local regulations and take advantage of the growing market. Swiggy’s rival, Zomato, has seen its stock surge over 100% since its listing in 2021, reaching a market cap of $29 billion.
Swiggy’s Instamart, one of the top quick-commerce businesses in India, promises deliveries within 10 minutes. These companies are changing consumer behavior in urban areas and capturing a significant share of the online grocery delivery market. Swiggy’s co-founder believes that the growth of Instamart will lead to a significant transformation in the company’s e-commerce segment.
The company’s unique supply chain system involves setting up hundreds of “dark stores” near residential and business areas to ensure quick deliveries. This approach sets them apart from traditional e-commerce players like Amazon and Flipkart. Swiggy operates over 600 such facilities, while Zomato’s Blinkit has 791 stores.
Investors and analysts have expressed doubts about the quick-commerce model’s viability in smaller Indian cities and towns. Swiggy’s IPO will show how willing investors are to bet on growth-focused business models in challenging global conditions. For investors like Prosus and Accel, this IPO could result in significant returns, marking a major success in the Indian market.
