Swiggy Debuts on Dalal Street, Rewarding Early Investors with Impressive Gains

Food and grocery delivery giant Swiggy has officially debuted on Dalal Street with a remarkable $1.3 billion IPO, creating one of the largest liquidity events in India for its early investors, including Prosus, Accel, Elevation Capital, and SoftBank.

Swiggy’s shares saw a significant 17% listing premium on the BSE, giving existing shareholders an opportunity to profit and increasing the valuation of their remaining stakes.

Swiggy’s IPO: A Landmark Liquidity Event for Early Investors

Swiggy’s IPO marks a notable financial event in India's startup ecosystem. Early investors made the most of this opportunity, with major shareholders selling shares worth Rs 6,400 crore through an offer-for-sale (OFS), yielding a substantial profit. The initial 17% premium added further value, making this a rewarding exit for stakeholders.

Prosus’s Investment Journey with Swiggy

As the largest stakeholder in Swiggy, global tech investor Prosus holds a 25% stake in the company, worth approximately Rs 26,507 crore (or $3.14 billion). Since 2017, Prosus has invested around $1.3 billion in Swiggy over multiple tranches.

Prosus recently reduced its stake to avoid being classified as a promoter by SEBI regulations, down from 31%. “Our intent is to be a long-term investor in Swiggy and we will evaluate as conditions on investment ...,” Prosus President and Chief Investment Officer Ervin Tu said.

Prosus Maintains its Long-Term Investment Strategy

Ervin Tu emphasized Prosus’s commitment to holding its Swiggy position with no rush to exit, comparing this investment to Prosus’s long-standing stake in Tencent, where it still owns about a quarter of shares.

SoftBank’s and Other Investors’ Substantial Returns

Masayoshi Son’s SoftBank, which entered Swiggy in 2021, is now witnessing $1 billion in value for its $450 million investment. Likewise, venture capital firm Accel, which invested $75 million in Swiggy, holds a 4% stake valued at Rs 4,310 crore, delivering an impressive 35x return. Elevation Capital’s stake has multiplied by 34x, while Norwest Venture Partners has seen a 26x return on their investment.

Founders and Employees Reap the Rewards of Swiggy’s IPO

Swiggy’s IPO has not only rewarded institutional investors but also created significant wealth for founders and employees. Swiggy CEO Sriharsha Majety now holds a stake worth Rs 5,381 crore ($640 million), while co-founders Nandan Reddy and Rahul Jaimini’s stakes are valued at Rs 1,705.3 crore ($203 million) and Rs 1,108.3 crore ($132 million), respectively.

A Historic Day for Swiggy’s Founders

Swiggy CEO Majety described the IPO as a milestone in his journey, stating, “It's been a long phase of sinking in for me and today is just another day of that sinking in. The last few months have been preparing for this day and what comes after, and here we are.”

ESOPs Unlock Value for Swiggy Employees

Swiggy’s stock market listing unlocked approximately Rs 9,000 crore in ESOPs, positioning nearly 500 Swiggy employees in the ‘crorepati’ bracket, as per ET’s report. This ESOP pool is among the largest in Indian IPO history and marks a momentous reward for employees' contributions to Swiggy’s growth.

Stock Performance on Debut Day

Swiggy’s stock saw significant interest on its debut day, with the share price reaching an intra-day high of Rs 465.3 before closing at Rs 455.95. This marks a 17% premium, nearly hitting the upper circuit limit.

Conclusion:

Swiggy’s successful IPO has solidified its position in the market while generating impressive returns for early investors and significant financial rewards for founders and employees. Prosus, SoftBank, Accel, and other investors are celebrating this liquidity event as Swiggy now stands as a prominent Indian public company, reflecting the resilience and growth potential of the country’s tech startups.

This debut marks a new chapter for Swiggy, opening doors for further expansion and sustained investment.