During a post-earnings call, tech investor Prosus refused to disclose any intentions regarding the sale of part of its 32.6 percent stake in Swiggy's $1.2-billion IPO.
Given Prosus' significant shareholding in Swiggy, it is reportedly expected to be classified as a promoter, which will subject it to various restrictions on the timing and manner of selling its shares once the company goes public.
Read: Prosus Sees Improvement in Swiggy's Quick Commerce Unit Economics: Report
For promoters of companies that are going for IPOs, market regulator Securities and Exchange Board of India (SEBI) has various guidelines. One of them is, “In a public issue by an unlisted company, the promoters shall contribute not less than 20 per cent of the post-issue capital." Additionally, “the promoters shareholding after offer for sale shall not be less than 20% of the post-issue capital.”
Restrictions on when to sell the shares and how to sell them are implemented for the promoters once the company goes public. Similarly, in the case of post-offer shareholding, companies have a three-year lock-in period.
Speaking to the media, a spokesperson from Prosus said, “Swiggy is an important part of our portfolio, and we are big believers in Swiggy. We can't comment on whether we are going to sell in the IPO or not. We really like the business, and we hope we can help the business' performance.”
In April of this year, Swiggy filed its IPO with the Securities and Exchange Board of India, SEBI. The company plans to raise Rs 3,750 crore via a fresh issue and around Rs 6,664 crore as an offer for sale.
In its report, Prosus mentioned that Swiggy’s revenue grew 24 per cent, excluding M&A in the 2023 financial year. The report adds, “In its tenth year of operations, Swiggy‘s GOV3 grew 26 per cent year on year, and its ever-transacted user base reached the milestone of 104 million at the end of December 2023, supported by a fleet of around 387 000 active delivery partners. Prosus held 32.6 per cent of Swiggy at the end of the reporting period.”
