Mumbai, India – Swiggy’s delivery team in Mumbai made headlines by attempting a Guinness World record for the largest Vada Pav delivery, a popular Indian burger, across the city. The team successfully delivered an impressive 11,000 Vada Pavs, setting a new record in the process. Following this achievement, Swiggy’s shares surged over 9% on their trading debut, driven by the success of the company’s recent IPO.
Backed by SoftBank, Swiggy secured 113.27 billion Indian rupees ($1.34 billion) through its IPO, which was oversubscribed by more than three times. The IPO included the sale of existing shares worth 68.28 billion rupees and a fresh issue of shares worth 44.99 billion rupees. Notably, the shares allocated to institutional buyers were subscribed more than six times, while those for retail investors were 114% subscribed.
The lead bookrunners for Swiggy’s IPO included Kotak Mahindra Capital, J.P. Morgan India, and Citigroup Global Markets India. Swiggy plans to utilize the net proceeds of 43.59 billion rupees from the fresh share issue to pay off debts in its subsidiary Scootsy and to invest further in the subsidiary. Additionally, the funds may be used for acquisitions and general corporate purposes to drive growth.
Despite optimistic outlooks on Swiggy’s growth potential and improving margins, concerns about profitability linger. Macquarie Equity Research highlighted the challenges in achieving profitability, particularly for Swiggy’s delivery arm, Instamart. The research firm pointed out issues such as lower average order values outside major cities and inflationary pressures from regulatory actions.
While Swiggy faces hurdles in profitability, Macquarie remains positive about the company’s ability to compete with market leader Zomato in the food delivery segment. Although Swiggy is currently less profitable due to higher branding and employee costs, it is poised to narrow the gap as it expands its customer base and continues to innovate in the delivery space.