Swiggy Limited

Swiggy is a new-age, consumer-first technology company offering users an easy-to-use convenience platform, accessible through a unified app - to browse, select, order and pay for food ('Food Delivery'), grocery and household items ('Instamart'), and have their orders delivered to their doorstep through the on-demand delivery partner network. The platform can be used to make restaurant reservations ('Dineout') and for events bookings ('SteppinOut'), avail product pick-up/ dropoff services ('Genie') and engage in other hyperlocal commerce (Swiggy Minis, among others) activities. Company augments the value proposition to users through the membership programme called 'Swiggy One' providing discounts and offers in-app payment solutions like digital wallet 'Swiggy Money' (a pre-paid payments instrument), 'Swiggy UPI', and Swiggy-HDFC Bank credit card for additional benefits. They offer comprehensive business enablement solutions to restaurant partners, merchant partners (that sell grocery and household items on the platform) and brand partners including the alliance partners such as analytics-backed tools to enhance their online presence and user base; fulfilment services for streamlining their supply chain operations; and last-mile delivery. Company's primary business is operating a B2C (business-to-consumer) marketplace platform where they aggregate restaurant and merchant partners that can list their food and products; users can discover and purchase such items; and they facilitate the fulfilment of these orders through enabling delivery, reservations and payments, and lead generation for partners. They have five business segments – (i) Food Delivery; (ii) Out-of-home Consumption, covering dining out and events; (iii) Quick Commerce covering on-demand delivery of grocery and household items, (iv) Supply Chain and Distribution covering business-to-business ('B2B') supplies, warehousing, logistics and distribution for wholesalers and retailers, and (v) Platform Innovations covering the new initiatives and offerings, such as Swiggy Genie, Swiggy Minis, among others. . As per financial performance, Swiggy Limited has posted total income / net profits of Rs 11,269.55 Cr / Rs 357.61 Cr (FY22), Rs 12,844.09 Cr / 410.86 Cr (FY23), Rs 13,646.87 Cr / Rs 449.74 Cr (FY24) and Rs 3,213.47 Cr / 91.59 Cr (30.06.24 FY25). So as per previous financials data, company has shown good growth, but making consistent losses. Company has an average EPS of Rs (14.9) and average RoNW of (35.39)% for last three fiscals. Issue is priced at a P/BV of 11.6 as per NAV of Rs 33.61/- as on 30.06.24. As company is making losses, there is no point in calculating PE. As per RHP, comparison between listed peers is shown in above table. On BRLM's front, six lead managers are associated with this IPO, and have handled around 118 IPOs in last three fiscals. As per financials, Swiggy Limited has shown good growth, RoNW is (30.16)% and P/E is not available as company is making losses. So, issue looks fully priced as compared to listed peers. Company provides a market place for restaurant and merchant partners to list food items and products and provide services related to this like food delivery, bookings, quick commerce, etc, which is very competitive and fragmented business segment. So, we give NEUTRAL rating for this IPO. Readers must consult a qualified financial advisor prior to making any actual investment decisions.

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