Swiggy IPO Opens Today | IPO Proceeds Will Be Used To Drive Quick Commerce Growth, Says Company
📅 Nov 06, 2024CNBC-TV188 MIN1485 VIEWS14 SEGMENTS · 3 SPEAKERS
IPO Corner | 'Food delivery margin can go to 5% vs 0.8% now', says Sriharsha Majety & Group CEO, Swiggy. Rahul Bothra, CFO also tells Prashant Nair, Surabhi Upadhyay and Nigel D'Souza that the IPO proceeds will be used to drive quick commerce growth. Adds they expect quick commerce margin to improve.
#swiggy #swiggyIPO #swiggyIPOsubscription #swiggyIPOpriceband #swiggylisting #swiggyIPOlisting #swiggyGMP #cnbctv18 #businessnews #businessnewstoday #businessnewsinenglish #sharemarkettoday
Read More: https://www.cnbctv18.com/market/swigg...
https://www.cnbctv18.com/market/swigg...
🔴CNBC TV18...
Well, Swiggy's IPO opens today. It's a household brand, needs no introduction in terms of what they do. The IPO targets 11,327 crore rupees through a combination of fresh issue of 4,499 crore rupees. The IPO is priced at between 371 to 390 rupees per share. We have Swiggy's MD and Group CEO Sriharsha Majety and Chief Financial Officer Rahul Bothra. Gentlemen, good morning, great to have both of you here. Thanks for joining in. Sriharsha, if we can start with you. You'll have a lot of fresh capital with you. How do you plan to use it? Will it be used to regain some of the market share that you've lost in the food delivery business, or will the majority of it be used on the quick commerce side?
Sriharsha, can you hear me? I don't think they can hear me. Rahul, yeah, I can take that. Good morning to you and all your viewers. Yes, please, Rahul, go on.
Sure. So the primary proceeds that we are raising of roughly 4,500 crores, we are earmarking a large part of it to grow our quick commerce business. As you may have seen from our filings, our quick commerce business has seen a pretty steady growth path, growing at around 122% over the last three years, and we do expect to increase our dark store network coverage and also our geographical coverage with part of the proceeds. We're also going to use it to penetrate to more number of consumers. Over the last three years, we have added 60% more consumers on our platform, and some part of this proceeds will also be used on the advertising and sales promotion to penetrate more on the quick commerce business. The food delivery business itself has seen pretty steady growth. We are at a mature stage of the category, and we do expect to get a lot more organic users on that platform, which means the overall spending for advertising will be limited for the food delivery business.
Can you hear me now? Yes, I can. Sorry, no, that was a very helpful answer from Rahul, but I just wanted your thoughts, Sriharsha, on this. On what you plan to do, because you have lost share to Zomato in the food delivery service. They are ahead on the quick commerce side as well. What is going to be the strategy? We'll get to the numbers and debate in terms of how and when you turn margin positive, but just your thoughts on both these segments and what do you plan to do.
Hi, so firstly, thank you for having us both over today. I think what you mentioned is right. If you look at the 10-year history of food delivery, the last couple of years have seen us lose some share. However, in the midst of it, we've done a lot of improvements to our strategy and execution, and we're starting to feel very good about where things go from here. This year especially has seen us do a lot on the consumer innovation side. We've been really hunkering down on doing more for consumers from an affordability standpoint as well as convenience standpoint, and that is one thing that I am sure will keep us in good stead as we go into the next few years. While Rahul mentioned that it is a mature category, I do think that we have multi-decadal growth ahead of us, and the key for us will be to lock down on our strongholds and continue to do more in terms of affordability and unlocking new consumption occasions for our consumers. We're really excited about how it's all coming together now.
Okay, all right. Hi, good morning gentlemen, and thanks a lot for making life a lot simpler for us. But now, welcome to the stock market. The market will want to understand what's your vision going ahead. Talking about the food business itself, margins are sub-1%. Industry believes it should go to around 5%. Do you believe that's likely to happen? And also, if you could give us an updated market share in the food business between you all as well as Zomato.
Yes, I think the 1% numbers are right for the last quarter that we had published, and we absolutely do think that eventually the food delivery business will get closer to the 5% mark that you talked about. We've demonstrated that over the last couple of years with operating leverage kicking in and the unit economics as well improving at a steady clip. We feel good about our chances here.
7 more exchanges in this transcript
Sign in free to read the rest of this interview. No card required.
Majety, S. (2024, November 6). Swiggy IPO Opens Today | IPO Proceeds Will Be Used To Drive Quick Commerce Growth, Says Company [Interview transcript]. CNBC-TV18. CEOInterviews.AI. https://ceointerviews.ai/interview/590768/
MLA
Sriharsha Majety. "Swiggy IPO Opens Today | IPO Proceeds Will Be Used To Drive Quick Commerce Growth, Says Company." CNBC-TV18, 6 Nov. 2024. Transcript, CEOInterviews.AI, https://ceointerviews.ai/interview/590768/.
BibTeX
@misc{majety2024_590768,
author = {Sriharsha Majety},
title = {Swiggy IPO Opens Today | IPO Proceeds Will Be Used To Drive Quick Commerce Growth, Says Company},
howpublished = {Interview transcript, CNBC-TV18. CEOInterviews.AI},
year = {2024},
month = {nov},
url = {https://ceointerviews.ai/interview/590768/},
note = {Speaker-attributed transcript with timestamps}
}
