Food delivery firm Swiggy has successfully raised ₹10,000 crore through a qualified institutional placement. The capital infusion saw strong participation from domestic mutual funds and global investors. Food and grocery delivery company Swiggy raised ₹10,000 crore in fresh capital through its qualified institutional placement (QIP), which closed on Friday, according to a regulatory filing with the stock exchanges.
The Bengaluru-based company launched the QIP on Tuesday and allocated shares to leading domestic mutual funds and global investors at ₹375 per share, an 11 per cent discount to its Friday’s closing price of ₹416.70 on the BSE. The allotment price marked a nearly 4 per cent discount to the floor price set by Swiggy. The company had a provision to offer up to 5 per cent discount over the floor price of ₹390.51.
“The strong response to our QIP from both global and domestic institutional investors, including new investors since our IPO last year, reflects deep confidence in Swiggy’s business fundamentals, disciplined execution, and long-term value creation roadmap,” Sriharsha Majety, founder and group CEO of Swiggy, said in a statement.
Heightened competition
“The additional capital provides us the flexibility to strengthen our core businesses, scale Instamart while maintaining financial prudence, and invest in innovation to continue to deliver unparalleled convenience,” he added.
ET had reported on Wednesday that most of the bids received by the company were around ₹375 per share.
The fundraising comes amid heightened competition in the quick commerce segment. The fresh capital takes Swiggy’s cash balance to about ₹15,000 crore. The company expects to garner another ₹2,400 crore once the sale of its stake in urban mobility startup Rapido closes.
More than 80 per cent of Swiggy’s QIP was subscribed by domestic investors, with mutual funds such as ICICI Prudential, SBI Mutual Fund and Aditya Birla Sun Life picking up 37 per cent of the issue. ICICI Prudential was the biggest buyer, with 16 per cent of the placement getting allocated to it.
Other global investors that participated in the QIP included Temasek, Norway’s global pension fund, Vanguard, Capital Group, Nomura and Goldman Sachs.
Swiggy had earlier said that it would deploy ₹4,475 crore from the QIP proceeds towards expanding its quick commerce network.
Its quick commerce unit Instamart is locked in a battle for market share with 10-minute delivery players, including market leader Blinkit, Nexus Venture Partners-backed Zepto and Tata Digital-backed BigBasket, in addition to Flipkart and Amazon. Zepto is expected to file its confidential papers for its initial public offering (IPO) soon.
Swiggy’s consolidated cash burn increased to ₹740 crore in the September quarter, higher than Eternal’s, with Instamart accounting for a large share. By September, the company had already used up more than 80 per cent of the proceeds from its November 2024 IPO, primarily to fund quick commerce losses.
ET had first reported about Swiggy’s QIP plans on October 30. This was Swiggy’s first capital raise since its IPO in November 2024, when it raised about ₹4,500 crore.
With the three largest players in the segment, Blinkit, Zepto and Instamart, being loss-making, industry executives have also raised questions over the public markets’ willingness to support further cash burn.
Blinkit CEO Albinder Dhindsa told ET in an interview on December 2 that the public markets’ appetite for providing capital to the quick commerce sector for funding balance sheet-supported expansion was limited. He underscored that the sector would soon have to confront questions around sustainable growth.
US retail firm Amazon is also expanding its quick commerce operations. Its senior vice president for emerging markets Amit Agarwal told ET in an interview last week that the company had seen strong traction in cities where its quick commerce service had been launched, taking on Eternal-owned Blinkit, Swiggy’s Instamart and Zepto in an increasingly competitive fight for customer wallet share in India’s major urban markets.
According to BofA Research, Blinkit, the leader in quick commerce, has more than 50 per cent market share, with the remaining divided among Zepto, Instamart, Tata Digital-backed BigBasket, Flipkart Minutes and Amazon Now.
Walmart-owned Flipkart, Amazon’s biggest ecommerce rival in India over the years, is also in the 10-minute delivery segment and is on track to have 800 dark stores by the end of this year.
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