Swiggy announces ESOP liquidity event of $65M ahead of IPO

Foodtech platform Swiggy on Monday announced liquidity event of stocks worth up to $65 million (Rs 543.5 crore) granted under its Employee Stock Ownership Plan (ESOP) as it gears up for an IPO. 

The liquidity event is a part of a secondary transaction valuing the company in the range of $9 billion to $10 billion, according to sources.

This is the fifth ESOP liquidity programme undertaken by Sriharsha Majety-led Swiggy. It rolled out its second ESOP in July 2023 worth nearly $27-30 million (Rs 225.8 crore to Rs 250.9 crore) which is likely to benefit nearly 2,000 employees. It had also launched a committed two-year ESOP liquidity programme for employees in October 2021.

“So far, the company has cumulatively enabled over Rs 1,000 crore of ESOPs liquidity over the five events, benefitting over 3,200 employees,” the company said in a statement. 

It has confidentially filed for a $1.2 billion (Rs 10,400 crore) initial public offering with the Securities and Exchange Board of India and plans to raise up to Rs 3,750 crore in fresh capital. Swiggy's investors and other shareholders intend to sell shares worth Rs 6,664 crore as part of the offer-for-sale component in the IPO. 

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Swiggy raised its platform fee by 20% to Rs 6 in certain key markets as it looks to pad its bottom line ahead of its public listing. However, some orders still log a platform fee in the range of Rs 5 to Rs 7 as Swiggy tries to improve its take rate in a bid to woo investors. 

Its listed peer Zomato moved in a different direction after it granted 40 million ESOPs worth Rs 890 crore earlier in July, even after nearly a fourth of investors voted against the motion. Zomato shares also reached an all-time high on the back of positive investor sentiment taking its founder’s stake above the $1 billion mark.

The copy was updated to reflect additional information.