Swiggy ESOPs Liquidity Programme

Swiggy Introduces $65 Million ESOPs Liquidity Plan Prior to IPO

Swiggy, the prominent food delivery giant backed by investors such as Softbank, Prosus, and Invesco, has announced its fifth employee stock options (ESOPs) liquidity programme. Valued at $65 million, this initiative comes as Swiggy prepares for its initial public offering (IPO) and faces a competitive market landscape. Swiggy ESOPs Liquidity Programme

Details of the ESOPs Liquidity Programme

This latest ESOPs liquidity programme is a significant move by Swiggy to retain talent and foster loyalty among its employees. Girish Menon, head of human resources at Swiggy, Swiggy ESOPs Liquidity Programme, emphasized the importance of rewarding employees and providing wealth-creation opportunities as the company grows.

Key Points:

• Programme Value: $65 million
• Eligible Employees: About 2,000 employees across various levels and functions
• Purpose: To retain talent, foster loyalty, and unlock wealth-creation opportunities for employees

Secondary Transaction and Valuation

The ESOPs liquidity programme involves a secondary transaction at a discounted valuation of over $9 billion.  Swiggy ESOPs Liquidity Programme In such transactions, shareholders sell their stakes to existing or new investors without injecting new capital into the company. These transactions are typically priced lower than primary shares.

Swiggy’s Financial Journey

In 2022, Swiggy raised $700 million in a funding round led by Invesco, achieving a valuation of over $10.7 billion and entering the decacorn club. Despite experiencing markups and markdowns, Swiggy’s valuation was revised to $12.7 billion in April 2023 by Invesco. This revision comes ahead of Swiggy’s anticipated $1.2 billion IPO. Swiggy ESOPs Liquidity Programme

Historical ESOPs Liquidity Programmes:

• 2021: Swiggy committed to rewarding employees for their performance over two years
• 2022: $23 million ESOPs liquidity programme
• 2021: Repurchased shares worth $50 million from 2,000 employees
• 2018: Buybacks worth $4 million
• 2020: Buybacks worth $9 million

Cumulatively, Swiggy has enabled over ₹1,000 crore of liquidity across these events, benefiting more than 3,200 employees.

IPO Filing and Capital Raising Plans

In April 2023, Swiggy filed its draft red herring prospectus (DRHP) for an IPO with the Securities and Exchange Board of India (Sebi) via the confidential filing route. The company aims to raise about $450 million in fresh capital and another $800 million through an offer-for-sale component.

Challenges and Market Dynamics

Swiggy has faced significant challenges over the past few quarters, including a slowing market and increasingly price-conscious customers. The competitive landscape has intensified, with other players striving to expand their user base, minimize cash burn, and achieve positive unit economics. Additionally, Swiggy has experienced senior-level management exits over the past year.

Company Background and Financial Performance

Founded in 2014 by Sriharsha Majety, Nandan Reddy, and Rahul Jaimini, Swiggy has grown to become a major player in the food and grocery delivery sector. The company’s operating revenues increased by about 45% to ₹8,264 crore in FY23, although losses widened by 15% to ₹4,179 crore from the previous year. Swiggy has raised over $3.5 billion from several investors, including Prosus, SoftBank, GIC, and QIA.

Conclusion

Swiggy’s $65 million ESOPs liquidity programme is a strategic move to reward and retain its employees as it prepares for an IPO and navigates a competitive market. With a history of successful ESOPs programmes and significant financial backing, Swiggy continues to strengthen its position in the food and grocery delivery market.

FAQs:

1. What is Swiggy’s latest ESOPs liquidity programme?

• Swiggy has announced a $65 million employee stock options (ESOPs) liquidity programme to reward its employees and retain talent as it prepares for an IPO.

2. How many employees are eligible for this ESOPs liquidity programme?

• About 2,000 employees across various levels and functions are eligible to participate in the programme.

3. What is the purpose of the ESOPs liquidity programme?

• The programme aims to retain talent, foster loyalty among employees, and unlock wealth-creation opportunities as Swiggy navigates a competitive market and prepares for a public listing.

4. What is the valuation of Swiggy for this secondary transaction?

• The secondary transaction is occurring at a discounted valuation of over $9 billion.

5. What is a secondary transaction in the context of ESOPs?

• In a secondary transaction, shareholders sell their stakes to existing or new investors without injecting new capital into the company. These transactions are typically priced lower than primary shares.

6. How does this ESOPs liquidity programme compare to Swiggy’s previous ones?

• This is Swiggy’s fifth ESOPs liquidity programme since 2018 and the third consecutive one since 2022. Cumulatively, these programmes have enabled over ₹1,000 crore of liquidity and benefited more than 3,200 employees.

7. How much has Swiggy raised in total from its previous funding rounds?

• Swiggy has raised over $3.5 billion from several investors, including Prosus, SoftBank, GIC, and QIA.

8. What are Swiggy’s plans for its IPO?

• Swiggy filed its draft red herring prospectus (DRHP) for an IPO with the Securities and Exchange Board of India (Sebi) in April 2023. The company aims to raise about $450 million in fresh capital and another $800 million through an offer-for-sale component.

9. What challenges has Swiggy faced recently?

• Swiggy has faced a slowing market, increasingly price-conscious customers, and intensified competition. Additionally, the company has experienced senior-level management exits over the past year.

10. What is Swiggy’s financial performance? – Swiggy’s operating revenues increased by about 45% to ₹8,264 crore in FY23, although losses widened by 15% to ₹4,179 crore from the previous year.
11. Who are the founders of Swiggy? – Swiggy was founded in 2014 by Sriharsha Majety, Nandan Reddy, and Rahul Jaimini.
12. What other initiatives has Swiggy taken regarding ESOPs? – In 2021, Swiggy committed to rewarding its employees for their performance over the next two years. Last year, Swiggy repurchased shares worth $50 million from 2,000 employees. In 2022, it initiated a $23 million ESOPs liquidity programme, and in 2018 and 2020, it conducted buybacks worth $4 million and $9 million, respectively.

13. How does this ESOPs programme benefit Swiggy? – The ESOPs programme helps Swiggy retain key talent, foster loyalty among its workforce, and maintain

Swiggy ESOPs Liquidity Programme

Budgeting Basics: Understanding What a Budget Is and How to Create One