Temasek, top funds bid in Swiggy’s US$1.1 billion share sale

[MUMBAI] Global investors, including Temasek Holdings and Capital Group, are offering to buy shares in Swiggy, according to people familiar with the matter, as the Indian food delivery company seeks fresh funds a year after its market debut.

India’s top asset managers including SBI Funds Management, ICICI Prudential Asset Management and HDFC Asset Management, also participated in the US$1.1 billion offering, the people said, asking not to be identified as the information is private. Among other global investors, Fidelity Investments, BlackRock Investments and Nomura Holdings have placed bids, they said.

Most bids were clustered around 375 rupees a share, they said, compared with the indicative price of 371 rupees, which represents a 6.8 per cent discount to Swiggy’s last closing price. The allotment of shares will happen later this week.

Representatives for Swiggy and Temasek declined to comment, while other investors did not immediately respond to requests for comments.

The fundraising underscores the Indian e-commerce market’s rapid expansion amid surging demand. Grocery delivery firms are focusing on growth over margins to capture market share and an intensifying price war is weighing on their shares.

Swiggy’s stock has declined 25 per cent this year, compared with an over 9 per cent gain in the benchmark NSE Nifty 50 Index.

Local players are racing against Amazon.com and Walmart-backed Flipkart to build dense networks of neighbourhood warehouses and ultra-fast delivery fleets capable of shipping orders within minutes.

In the share sale launched on Tuesday, Prosus-backed Swiggy offered about 269.5 million shares, according to terms seen by Bloomberg.

Proceeds will be used to expand and operate the company’s network, including dark stores and warehouses, the terms showed.

Swiggy also plans to invest in its technology and cloud infrastructure, and pursue growth opportunities through potential acquisitions. BLOOMBERG