As the Covid-19 lockdowns forced people indoors it prepared the ground for a new business – a new category of firms arose that began delivering almost everything from staples to food, from small errands to home care products, to the doorstep of consumers. The business boomed and so did investor appetite.
Zomato in July 2021
In July 2021, Zomato raised a storm in the IPO market with an issue that was oversubscribed 38 times. Now it is the turn of Zomato’s rival Swiggy and quick commerce firm Zepto. A pre-IPO frenzy is gripping the market with Amitabh Bachchan family picking up a stake in Swiggy and Motilal Oswal boss Ramdeo Agarwal buying a stake in Zepto.
Ramdeo Agarwal’s optimism
Ramdeo Agarwal, who is one of the most visible and articulate members of the broking community, has been bullish about the potential of the quick commerce segment. The family of the biggest brand in Bollywood, Amitabh Bachchan has also reportedly picked up a stake in Swiggy. Both firms have been in the news for fundraising before they hit the IPO street. According to reports both Big B and Agarwal have bought shares from employees and the early investors of these firms.
Swiggy’s IPO papers pending
Swiggy, which is backed by the world’s largest tech-based venture fund Softbank, had targeted to obtain a valuation of around $15 billion for its upcoming IPO. In April 2024, Swiggy was armed with shareholder approval to raise up to $1.25 billion (about Rs 10,400 crore at the current exchange rate). The buzz is Sebi might approve its application in September. In 2022, Invesco valued Swiggy at $10.7 billion.
Swiggy’s food delivery business has become profitable but its Instamart, its grocery delivery vertical, is still in the red. Swiggy has about 550 warehouses in 35 Indian cities.
Zepto’s IPO in the horizon
Zepto, an online grocery delivery platform, is on a fundraising spree. Mumbai-based Zepto is raising $340 million in an exercise which valued the company at $5 billion. Its IPO is expected in the next 12 months, said reports.
Zepto’s sales stood at Rs 2,500 crore in FY23 and would have doubled in FY24. Two Stanford University dropouts, Aadil Palicha and Kaivalya Vohra, founded Zepto in April 2021. They became India’s youngest billionaires at the age of 21.
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As the current generation becomes more and more busy at work and prefer everything to be delivered to their doorstep, the frenzy around quick delivery apps is rising. Biz News Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
