Swiggy is gearing up for a highly anticipated IPO, filing its updated Draft Red Herring Prospectus (DRHP) as it eyes a significant slice of India’s massive Rs 2 lakh-crore food delivery market. Investors, eager to diversify their portfolios, will watch closely as Swiggy faces a tough profitability challenge amid fierce competition from Zomato, BigBasket, and others.

Founded in 2014 by Sriharsha Majety, Nandan Reddy, and Rahul Jaimini, Swiggy has evolved from a food delivery service into a tech-driven platform offering hyperlocal delivery solutions. With over 1.5 lakh restaurant partnerships across India, the company has secured a strong presence in major cities and tier-2 towns alike.

Swiggy’s IPO will include a fresh issue worth Rs 3,750 crore and an offer for sale (OFS) exceeding Rs 6,500 crore, bringing the total IPO size to over Rs 10,000 crore. This strategic move offers an alternative to Zomato, which listed in 2021, for investors looking to broaden their stakes in the food delivery sector.

Global investors such as SoftBank Vision Fund, Prosus, Accel, and Elevation Capital hold major stakes in the company, with high-profile individuals like Amitabh Bachchan, Madhuri Dixit, and cricketers Rahul Dravid and Zaheer Khan also investing in Swiggy’s pre-IPO shares.

While Swiggy’s revenue surged by 36% to Rs 11,247 crore in FY24, the company is still battling losses, albeit reduced. Its losses stood at Rs 2,350 crore, a significant improvement from Rs 4,179 crore in FY23. However, recent quarterly results showed a slight uptick in losses, raising concerns over the company’s ability to achieve profitability. This comes as Zomato reported a net profit of Rs 351 crore on revenues of Rs 12,114 crore for FY24, underscoring the gap between the two rivals.

Swiggy’s diversified offerings, including Instamart for grocery delivery, position it well in the broader quick-commerce segment. However, competition is intensifying as Walmart (via Flipkart) and BigBasket push deeper into the space. The company’s strategy of reduced discounts, tighter cost controls, and product diversification aligns with the industry’s shift towards integrated services.

Swiggy and Zomato collectively control over 90% of India’s food delivery market. With Zomato already establishing itself as a public market favorite, thanks to its profitability and Blinkit acquisition, Swiggy faces the challenge of convincing investors that it can follow suit.

Swiggy’s IPO not only provides an exit route for early investors but also presents an opportunity to raise capital for further growth. Last valued at $10.7 billion, the company is expected to seek a valuation between $10 billion and $13 billion when it goes public. The listing comes at a time when India’s IPO market is buoyant, adding excitement to Swiggy’s public debut.

Swiggy’s IPO marks a crucial step in the company’s journey, but challenges remain. As it seeks to raise funds and narrow its losses, Swiggy must navigate a competitive landscape dominated by key players like Zomato, BigBasket, and Flipkart. Investors will be keen to see how Swiggy positions itself for long-term profitability in India’s growing food and quick-commerce market.

Indian stocks looked set for a muted start on Friday after benchmark indices snapped their seven-day gaining streak the previous day. SGX Nifty futures traded lower by 3.5 points or 0.02% at 21,073 ahead of the market open, signaling flat-to-negative moves initially.

On Thursday, markets closed lower amid high volatility. The BSE Sensex shed 132.04 points, or 0.19%, to end at 69,521.69. Meanwhile, the NSE Nifty 50 index dropped 36.50 points, or 0.17%, settling at 20,901.20. Despite the decline, the overall market trend remained positive.

Global cues were also somewhat supportive after Wall Street indices closed higher overnight. However, investors’ focus will now turn to the RBI’s monetary policy meeting outcome scheduled later today.

RBI Governor Shaktikanta Das is expected to announce the rate decision around 10 AM. With the policy announcement looming, some stocks that could be in focus today include Zomato, Reliance Industries and InterGlobe Aviation.

The session could see a tentative start tracking global peers and ahead of the RBI decision. Key indices may struggle to build on the recent upmove amid a cautious mood.