Swiggy, through its subsidiary Scootsy, is planning significant investment of ₹1,178.7 crore to strengthen its quick commerce segment by expanding its network of dark stores.
Specifically, the funds will be allocated to support the setup and expansion of these dark stores, with ₹755.4 crore dedicated to expanding the dark store network and an additional ₹423.3 crore for lease and licence payments associated with these stores.
The company says the investment aligns with Swiggy’s goal of bolstering its quick commerce capabilities, which involves establishing dedicated facilities or “dark stores” that facilitate faster delivery of goods directly to consumers. By expanding its infrastructure in this way, Swiggy says it aims to meet the increasing demand for rapid delivery services, capitalising on the growth in quick commerce and enhancing its overall operational efficiency in this segment.
How big are Swiggy’s losses?
By March 2024, Swiggy’s annual revenue increased to ₹11,247.39 crore, from ₹8,264.59 crore for FY23 and from ₹5,704.8 crore recorded in FY22. Its net losses haven’t expanded quite in tandem. Expanding from ₹3,628.89 crore in FY22 to ₹4,179.31 crore in FY23 to but then sharply contracting to ₹2,350.24 crore for the year ended March 2024.
This improvement in revenue likely reflects Swiggy’s expansion efforts, though it continues to operate at a loss. The narrowing of the net loss in 2024 suggests efforts to achieve profitability, while revenue growth indicates increasing demand for its services.
Ahead of the IPO, the food delivery platform mobilised ₹5,085 crore from anchor investors by allotting 13.04 crore shares to 151 funds at ₹390.
- Also read: Will Swiggy IPO sail through on last day?
The IPO targets ₹11,327.43 crore through a combination of fresh issue worth ₹4,499 crore and offer for sale of 17.51 crore shares worth ₹6,828.43 crore.
Investors selling in the OFS included Accel India IV (Mauritius) Ltd, Apoletto Asia Ltd, Alpha Wave Ventures, LP, Coatue PE Asia XI LLC, DST EuroAsia V B.V, Elevation Capital V Ltd, Inspired Elite Investments Ltd, MIH India Food Holdings B.V, Norwest Venture Partners VII-A Mauritius and Tencent Cloud Europe BV.
The Swiggy IPO had been subscribed 34 per cent or 0.34 times so far on the second day. The IPO opened on Wednesday but saw a muted response from investors with a 12 per cent subscription. The IPO closes on November 8.
- Also read: Swiggy IPO subscribed 35% on Day 2