Swiggy IPO: A Deep Dive into India's Food Delivery Giant

As India's digital economy continues to evolve, Swiggy, a household name in the food delivery space, has announced its Initial Public Offering (IPO).

Founded in 2014, this tech-driven platform has transformed from a simple food delivery service to a comprehensive ecosystem.

Let's analyze what this IPO means for investors and the industry at large.

The Swiggy Ecosystem

Swiggy has strategically diversified its operations into five key business units:

  • Food Delivery - Their core business 
  •  Out-of-home consumption (including Dineout for restaurant reservations) 
  •  Quick Commerce (Instamart for groceries and household items) 
  •  Supply chain & distribution (B2B services) 
  •  Platform innovation (Swiggy Genie and Minis)

The company has built a robust ecosystem with additional services like:

  • SteppinOut for event bookings 
  •  Swiggy One membership program 
  •  Digital wallet "Swiggy Money" 
  •  Co-branded credit card with HDFC Bank

Market Opportunity and Growth Potential


Digital India's Explosive Growth

Internet users in India are expected to surge from 800-830 million to 1,040-1,080 million by 2028.

Smartphone penetration is projected to reach 950-990 million users by 2028.

Only 30-35% of smartphone users currently shop online, indicating massive growth potential.

Online Food Delivery Market

The sector has grown exponentially from ₹112 billion in 2018 to ₹640 billion in 2023. 

 Expected to reach ₹1,400-1,700 billion by 2028 (CAGR of 17-22%).


Untapped Market Potential

India's food services market represents only 9-12% of total food consumption, significantly lower than:

  • United States (55-60%)
  • China (37-42%)

This gap suggests substantial room for growth as India's organized food service sector expands.

Financial Performance and Concerns


Gross Order Value has seen a significant increase over the last 3 years. Gross Revenue has increased with a CAGR of 34%. Average Monthly Transacting Users and Average Monthly Transacting Delivery Partners have also seen a significant surge.

Financials of the Food Delivery Business also show an interesting read.


Some Key Risk Factors

1. Persistent Losses: The company has reported net losses since inception and negative operating cash flows


2. Competitive Landscape: Intense competition in the food delivery space


3. Employee Attrition: Higher than industry standard rates


Pending Litigations against the Company

The pending litigations figure amounts to approx. 3.22% of Company’s Gross Revenue


Valuation Metrics

Market Cap Post IPO: ₹87,300 Crores 

Comparison: Zomato's market cap is ₹2.22 Lakh Crores 

Price to Sales Multiple: 7.76 (vs Zomato's 13.4) 

P/E Ratio: Not applicable due to current losses

Use of IPO Proceeds

The funds will be utilized for:

1. Repaying borrowings of subsidiary Scootsy

2. Expanding Quick Commerce dark store network

3. Technology and Cloud Infrastructure Investment

4. Brand Marketing and Business Promotion

5. Potential Acquisitions and general corporate purposes

The IPO Details are as follows :


The success of Zomato's IPO and subsequent performance might serve as a benchmark, but investors should conduct thorough due diligence considering their risk appetite and investment goals.