Online food delivery platform Swiggy has increased its brand marketing and business promotion expenses in its updated IPO-related documents.
Swiggy, on 29 October, updated its Draft Red Herring Prospectus (DRHP) with Sebi- the regulatory body of the stock market in which it increased its ad expenses by 20 percent (approx).
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In the earlier DRHP, Swiggy had mentioned that it would utilise Rs 929.5 crore of its net proceed in brand marketing. However, in the latest document, Swiggy has increased the ad and promotional expenses to Rs 1115.3 crore.
Swiggy in its DRHP mentioned,”Our marketing initiatives may require continued investments, as we continue to expand our operations or as a result of competition… In addition, the evolving marketing approaches and tools may require us to experiment with, and incur additional expenses for, new marketing methods to keep pace with industry trends and user preferences”.
Of the total estimated amount proposed for brand marketing, which is Rs 1115.3 crore, Swiggy has planned to utilise Rs 61.5 crore in FY25, Rs 332 crore in FY26, Rs 359 crore in FY27 Rs 362 crore in FY28, respectively.
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“We intend to continue to invest in targeted marketing campaigns and other brand-building initiatives, cost-effectively, to create and increase brand recall, attract and retain more users, restaurant partners, merchant partners, brand partners, and delivery partners to our platform,” Swiggy said in its DRHP.
Swiggy spent Rs 558.9 crore in brand marketing and business promotional expenses in fiscal year 2024 which was 8.17 percent of total other expenses. Before this, the compnay spend Rs 595.4 crore (FY 23) in brand marketing and Rs 528.34 crore in FY 22. In the first quarter of FY 25, Swiggy’s ad spending soared to Rs 147.252 crore– 7.43 percent of the total other expenses.
In January 2024, Swiggy entered into an agreement with a marketing agency (Brand Promotion Arrangement). The company proposed to spend up to Rs 1,114.5 crore, over four calendar years on brand marketing services across various channels, including traditional media (including TV, print, and radio media), OTT media, and digital media.
Apart from brand expenditure, Swiggy has made several other tweaks in its latest document. The Bengaluru-based company has increased the targeted primary fundraising through the issuance of new shares to Rs 4,499 crore from its earlier plan of Rs 3,750 crore. In the offer-for-sale window, the company will now sell 17.51 crore shares.
The Softbank-backed firm has also planned to allocate 20% higher capital to its quick commerce business at Rs 1,179 crore, upfrom Rs 982 crore. Swiggy said it intends to invest Rs 755.4 crore in expanding its dark store network.
Swiggy IPO will open for subscription on November 6 and close on November 8. The food delivery platform has set a price band of Rs 371-390 a share. Swiggy will make its debut on the stock exchanges on 13 November.