Swiggy IPO: Early investors clock big gains as Swiggy makes Dalal Street debut

Food and grocery delivery major Swiggy’s $1.3-billion IPO and its better-than-expected stock market debut has led to significant gains across the board for its early backers, including Prosus, Accel, Elevation Capital and SoftBank, emerging as one of the largest liquidity events for risk investors in India.

While existing shareholders sold stocks worth Rs 6,400 crore in the offer-for-sale (OFS), the listing premium has further strengthened the total value of their remaining ownership as the stock closed at a 17% premium to its listing price on the BSE.

The largest shareholder in Swiggy, South African and Dutch technology group Prosus’ stake is presently valued at nearly Rs 26,507 crore, excluding the Rs 4,1665 crore ($500 million) that it snagged during the Swiggy’s OFS.

Having first backed the Bengaluru-based firm in 2017, Prosus has, over the years, ploughed around $1.3 billion into the company across eight tranches, and now holds a 25% stake, down from around 31% that it held previously. The company, which has deployed $8 billion in Indian startups, had to trim its shareholding to avoid being termed a ‘promoter’ as per Sebi rules.

Prosus’s president and chief investment officer Ervin Tu said in a call with reporters on Wednesday that the investment firm will continue to hold its position in the company, adding that there is no rush to exit. He cited Prosus’ investment in Tencent where it still holds about a quarter of the Chinese technology major. “ Our intent is to be a long-term investor in Swiggy and we will evaluate as conditions on investment …,” Tu added.

Following the listing, Swiggy’s stock touched an intra-day high of Rs 465.3 before closing at Rs 455.95, marking a close to 17% premium, and nearly hitting the upper circuit. At the end of the day, Swiggy’s market capitalisation stood at Rs 1,02,062 crore (about $12.3 billion).

As for Masayoshi Son’s SoftBank, which first bet on the company in 2021, it is sitting on $1 billion of value for its $450 million invested in Swiggy as of close of trade Wednesday.

Venture capital firm Accel, which has pumped a total of $75 million in the company, presently holds a 4% stake which is valued at Rs 4,310 crore ($513 million). This is a 35x gain on its investment, among the biggest gains for the Silicon Valley fund.

For Elevation Capital it is a 34x gain on investment with its 2.63% stake valued at Rs 2,816 crore, while Norwest Venture Partners has logged a 26x return with its stake valued at Rs 2,926 crore.

Founders, employees cash in

Swiggy’s chief executive Sriharsha Majety’s current stake in the company is worth Rs 5,381 crore ($640 million), followed by other cofounders Nandan Reddy and Rahul Jaimini with 1,705.3 crore ($203 million) and 1,108.3 crore ($132 million), respectively.

“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 we have been preparing for this day and what comes after, and here we are,” Majety said during the listing ceremony in Mumbai.

ET reported that the company’s listing is poised to unlock Rs 9,000 crore worth of Esops, catapulting nearly 500 employees of Swiggy into the ‘crorepati’ league.

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