Food delivery and quick commerce platform Swiggy’s Initial Public Offering (IPO) was subscribed only 35% on the second day of bidding as broader market indices slipped in red. 

Sriharsha Majety-led Swiggy witnessed the quota reserved for employees being subscribed 1.15 times by the end of bidding on the second day. Retail investors subscribed to 84% of the shares. 

According to data from the Bombay Stock Exchange (BSE), non-institutional investors purchased 14% of their allocated shares, and qualified institutional buyers’ (QIBs) part was booked at 28%.  

As of the second day, Swiggy’s IPO received bids for 5.57 crore shares, amounting to 35% of the total issue size. The issue was subscribed 12% on day one.

Swiggy, which is set to list on Indian stock markets on November 13, initially aimed for a valuation of approximately $15 billion, but later updated its RHP to seek a valuation of around Rs 87,000 crore or about $11.3 billion at the upper price band. 

“Swiggy’s decision to lower its valuation leaves some upside room for the investors, we still recommend an AVOID recommendation to this issue due to the “reported negative” cash flows and ongoing losses, alongside a slightly high valuation of 7.7x FY24 price-to-sales,” noted Aditya Birla Money in a research report dated Nov 4. 

It raised nearly Rs 5,085 crore (about $605 million) from anchor investors, which included life insurance and mutual fund arms of HDFC, ICICI, and SBI. The anchor book, which witnessed participation from over 75 key domestic mutual funds, also saw bids from global mutual fund investors like Astrone Capital, Fidelity, and Blackrock.

Swiggy plans to raise close to Rs 11,700 crore in its IPO which will include fresh issue of 11.54 crore equity shares along with an offer for sale (OFS) of  17.51 crore equity share by existing stakeholders. It has set IPO price band at Rs 371- Rs 390.

Northern Arc has raised $65 million in debt commitments for its maiden Climate Fund, through its fund management arm, Northern Arc Investments IFSC Trust.

The debt commitments include $50 million from the United States International Development Finance Corp (DFC) and $15 million from the official Development Bank of the Republic of Austria, OeEB, it said in a statement on Thursday.

The non-banking financial institution’s (NBFC) fund aims to address critical funding gaps of growth stage startups in the solar energy, e-mobility, sustainable agriculture, and circular economy spaces.

“The significant investment from DFC and OeEB reinforces our ongoing commitment to revolutionise climate finance and transform the financial landscape for all households and businesses in India. By channelling these funds into green projects across our focus sectors of MSME, affordable housing, vehicle finance, agriculture finance, microfinance, and consumer finance, we aim to create a cascading effect that promotes sustainable development,” said Ashish Mehrotra, Managing Director and CEO, Northern Arc.

In October, the company launched its performing credit AIF fund (Category II), ‘Finserv Fund’, through its subsidiary Northern Arc Investment Managers (NAIM).

The fund aims to raise a target corpus of Rs 1,500 crore, including a greenshoe option of Rs 500 crore.

Northern Arc has assets under management (AUM) worth Rs 15,121 crore through its balance sheets and active AIF funds, as of September 30. It is backed by investors such as Sumitomo Mitsui Banking Corporation, LeapFrog, and 360 ONE, among others.

Edtech unicorn PhysicsWallah (PW) saw its losses widen significantly in FY 2023-24, fueled by a sharp rise in employee benefit costs and other expenditures, casting a shadow over a 2.6-fold increase in operating revenue.

The Noida-based company also revised its FY 2022-23 figures, now reporting a loss of Rs 84.1 crore, in contrast to the Rs 8.9 crore profit previously stated in its earlier consolidated financial statements.

The heavy losses come on the back of the edtech company’s rapid expansion over the past couple of years. PW, which initially focused on the test-prep segment, has rapidly diversified its educational offerings over the past few years to encompass everything—from school education to skills training—casting its learning net over a wide base of learners.

PW’s rapid expansion comes amid a turbulent period for BYJU’S, once the leading edtech platform and the poster child of the Indian startup ecosystem.

The Alakh Pandey-led firm reported a consolidated loss of Rs 1,131.3 crore in FY24, up 13.5X from Rs 84.1 crore recorded in the earlier fiscal period.

The reported losses were impacted by non-cash adjustments, such as Compulsorily Convertible Preference Shares (CCPS) amounting to Rs 756 crore, according to the company. This CCPS expense is recorded in relation to the buyback clause provided in the issued CCPS, based on the conversion of accounting standards from IGAAP to INDAS, it added.

After excluding the non-cash adjustment, the company’s actual cash losses come to approximately Rs 375 crore, up 4.4X.

The company had remained the only profitable edtech firm until FY22, while steadily growing its top line. 

Its operating revenue surged 160.7%, touching Rs 1,940.4 crore in FY24 compared to Rs 744.3 crore in FY23, as per its recent consolidated financial statements.

The startup’s total income reached Rs 2,015.1 crore, up 160.8% increase year-on-year (YoY).

For context, BYJU’S surpassed the Rs 2,000 crore revenue mark in FY20 and Eruditus in FY23, while PW achieved this milestone in its fourth year of operations. BYJU’S was incorporated in 2011, Eruditus in 2010, and PW in 2020.

Meanwhile, the company’s expenses surged by 280.4% to Rs 3,279.1 crore in FY24 compared with Rs 862 crore in FY23.

The sharp rise in expenses was driven by employee benefits, the firm’s second-largest cost centre, which jumped to Rs 1,159 crore—a 180.9% YoY.

Its other expenses surged by 442.4% YoY to Rs 1,660 crore, including a significant increase in miscellaneous expenses, which rose by 755.9% to Rs 1,452.7 crore.

Interestingly, PW also reduced its advertising and promotional expenses by 39.9%, although these still accounted for the company’s second-largest expense, totalling Rs 37.3 crore in FY24 compared with Rs 62.1 crore in FY23.

PW has experienced impressive growth, however, sustainable growth and profitability are essential, and it must navigate its own challenges as it expands.

Earlier this year, PW Co-founder Prateek Maheshwari told YourStory that FY24 was the year of “growth,” while FY25 is the year of “sustainable growth,” as PW aims to return to a profitable path. 

“We have bounced back this year, with the first two quarters being EBITDA profitable for the first time in our company’s history,” he added. EBITDA, or earnings before interest, taxes, depreciation and amortisation, is a measure of core operational efficiency.

While the profitability metric for FY25 cannot be determined due to the transition from I-GAAP to Ind-AS, this fiscal year is expected to be the highest in absolute EBITDA profitability since inception, according to Maheshwari. 

I-GAAP (Indian Generally Accepted Accounting Principles) refers to the traditional accounting standards used in the country, while Ind-AS (Indian Accounting Standards) is a set of accounting standards aligned with IFRS (International Financial Reporting Standards) for greater transparency and consistency.

In September, PW raised $210 million in a Series B funding round led by investment firm Hornbill Capital, with a sizable participation from venture capital firm Lightspeed Venture Partners. This was a significant milestone given the scarcity of substantial deals in India’s edtech sector lately.

With the latest funding round, PW’s post-money valuation has soared to $2.8 billion, making it the third-most valued edtech firm, trailing only Unacademy ($3.4 billion) and Eruditus ($3.2 billion), based on their last valuations.