Swiggy's $1B IPO To See Existing Investors Sell $600M, Prosus To Be Listed As Promoter

Swiggy’s upcoming IPO is reportedly likely to include at least $600 million in offer-for-sale by existing investors while global investor Prosus will likely have to be listed as a promoter.

What Happened: The Bengaluru-based company is gearing up for a $1 billion IPO in the coming few months. Prosus, the major stakeholder in Swiggy, may be categorised as a promoter for the upcoming IPO, Economic Times reported, citing sources.

The Dutch-listed investment arm of the South African conglomerate Naspers, Prosus, has been seeking to reduce its holding in Swiggy from the current 33% to below 26%. Under Indian regulations, a shareholder with a stake of 26% or more is considered a promoter, subjecting them to restrictions on share sales post-IPO.

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Why It Matters: Prosus, having invested around $1 billion in Swiggy, has been in talks with various investors to dilute its stake in Swiggy but has been unsuccessful because of disagreement over valuation, sources told the business daily.

The reported aim for Prosus is to shed the promoter tag to gain more flexibility in managing its investment after the IPO.

SoftBank has a similar problem with its investment in Oyo, where it holds a 46% stake. However, in the case of FirstCry, SoftBank reduced its holding to around 25.5% before the company filed its draft pre-IPO papers in December.

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