Swiggy Launches $65 Million ESOPs Liquidity Programme Ahead Of IPO

Swiggy, a leading food delivery company, has launched its fifth employee stock options (ESOPs) liquidity program, worth $65 million (Rs 543.5 crores). This initiative is supported by investors like Softbank, Prosus, and Invesco.

The company aims to retain its talent and build loyalty among its workforce while adjusting to a slower market and managing increased competition.

Swiggy’s ESOP Liquidity Program

Last year, Swiggy repurchased shares worth $50 million from 2,000 employees. In 2022, it initiated a $23 million ESOP liquidity program. According to Mint, the company conducted buybacks worth $4 million in 2018 and $9 million in 2020,

This latest program marks Swiggy’s fifth ESOP liquidity event since 2018 and the third consecutive one since 2022.

Benefit to Employees

Swiggy has been actively engaging in ESOP liquidity programs to benefit its employees.

• In 2021, Swiggy committed to rewarding employees for their performance over the next two years through its ESOP liquidation exercise.
• Such events have enabled over ₹1,000 crore of liquidity and benefited more than 3,200 employees.
• These initiatives aim to enhance employee satisfaction and retention by providing financial rewards and liquidity options.

Upcoming Secondary Transaction

The secondary transaction, valued at over $9 billion, is happening at a discount. This is expected to attract more investors as more employees join in. Swiggy’s co-founders, Sriharsha Majety and Nandan Reddy, will sell some shares in this upcoming ESOP liquidity event along with other employees of the company.

Company’s Perspective

Girish Menon, Head of HR at Swiggy, shared his thoughts on the company's approach to employee rewards. He said, “Rewarding employees by unlocking wealth-creation opportunities as Swiggy grows has always been a key priority for us,”

“Employees owning shares of their company creates alignment of incentives and a sharp focus on collaborative excellence, which is a virtuous cycle that we believe in and espouse. As we approach the milestone of a decade of consumer love for Swiggy, the latest ESOP event is an acknowledgment of our employees’ contributions and our commitment to sharing Swiggy’s success and growth with them,” he added.

Swiggy’s Journey

Founded in 2014 by Sriharsha Majety, Rahul Jaimini, and Nandan Reddy, Swiggy has raised over $3.6 billion. Investors include SoftBank, DST Global, Alpha Wave Global, Accel, Norwest Venture Partners, Prosus, and Elevation, among others.

If Swiggy lists at a $13 billion valuation, it will be similar to its rival Zomato’s market cap of $13.3 billion when Zomato went public in July 2021. Swiggy's gross order value (GOV) grew by 26% year-on-year for FY24. The company reported a trading loss of $158 million for FY24.

Although shares are currently discounted, experts and bankers are positive about Swiggy's IPO. The company is expected to be valued between $10 billion and $13 billion (about ₹83,500 crore to ₹1,08,500 crore) when it goes public.

Swiggy’s IPO Plans

In 2022, Swiggy raised $700 million in a funding round led by Invesco, reaching a valuation of over $10.7 billion and joining the Decacorn club. In April this year, Invesco updated Swiggy’s valuation to $12.7 billion.

This update comes ahead of Swiggy’s planned $1.2 billion initial public offering (IPO) in the next few months. In April, Swiggy filed its draft red herring prospectus (DRHP) for the IPO with the Securities and Exchange Board of India (Sebi) using a confidential filing route.

The company aims to raise about $450 million in new capital and another $800 million through an offer-for-sale. Swiggy is also looking to secure around Rs 750 crore from anchor investors in a pre-IPO round. Even though shares are traded at a discount, experts are positive about Swiggy's IPO.

Is it possible to invest in Swiggy apart from IPO?

Swiggy shares are not yet listed but they are available in the unlisted share market. With a positive market sentiment and accurate pricing, we can expect swiggy shares to get oversubscribed in the IPO.

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