This document provides an overview of the Indian hyperlocal commerce ecosystem, focusing on the food services and retail markets. It highlights the key macroeconomic and demographic trends driving the growth of this sector, including:

• Rapid Economic Growth: India is one of the fastest-growing economies in the world, with a projected nominal GDP of ₹297 trillion (US$3.7 trillion) in FY 2024. This growth is fueled by infrastructure investments, a young population, and improvements in the ease of doing business.
• Burgeoning Middle Class: The number of middle-class households in India is growing rapidly, leading to increased spending power and a greater demand for convenience-oriented products and services.
• Urbanization and Nuclearization: India is experiencing rapid urbanization, with a growing number of nuclear families in urban areas. This trend is driving demand for hyperlocal commerce platforms that offer convenience and efficiency.
• Increased Female Labor Force Participation: The rising number of dual-income households is leading to time constraints and a greater need for convenience-first offerings.
• Shift to Organized Retail: Indian consumers are increasingly shifting towards organized retail channels that offer convenience, trusted products, and services.

The document then delves into the specific growth of hyperlocal commerce platforms in the food services and retail sectors:

• Food Services: The Indian food services market is growing rapidly, driven by the increasing popularity of eating out and the rise of online food delivery platforms. The online Food Delivery market is expected to grow at a CAGR of 17-22% to reach ₹1400-1700 billion (US$17-21 billion) by 2028.
• Quick Commerce: The Quick Commerce segment is seeing the fastest growth among all retail channels in India, with a projected CAGR of 60-80% to reach ₹2.3-4.2 trillion (US$29-53 billion) by 2028. This growth is driven by the increasing demand for convenience and the ability of Quick Commerce platforms to address supply chain inefficiencies.

The document also highlights the value propositions offered by hyperlocal commerce platforms to various stakeholders:

• Consumers: Convenience, variety of selection, affordability, standardized customer experience, and time-sensitive and event-driven purchases.
• Restaurant and Brand Partners: Improved reach and discovery, revenue enhancement, strong advertising opportunities, generating incremental demand, and a level playing field.
• Delivery Partners: Greater flexibility and predictable income stream, improved quality of work, and added benefits.

The document concludes by emphasizing the significant growth potential of the Indian hyperlocal commerce ecosystem, driven by favorable macroeconomic and demographic trends, a large and growing consumer base, and the increasing adoption of digital payment methods.

The text explores the evolution of hyperlocal commerce platforms in India, focusing on Swiggy's business model and its position within the market.

The Rise of Quick Commerce:

• Quick Commerce platforms, offering deliveries within 30-60 minutes, have emerged as a successful model in India due to high-density urban markets and low penetration of organized grocery stores.
• The Quick Commerce market is growing rapidly, with an expected penetration of 17-30% in online retail by 2028.
• Quick Commerce has expanded beyond "food-for-now" needs, catering to regular stock-up purchases and becoming a primary online retail channel for brands.
• Leading FMCG brands are increasingly relying on Quick Commerce platforms, with some reporting up to 65% of their e-commerce business coming from these platforms.

Hyperlocal Commerce Platforms:

• Hyperlocal commerce platforms, like Swiggy, are evolving to serve multiple needs within a city, integrating food delivery, grocery, and other services into a unified app.
• This integrated approach offers advantages like leveraging existing user bases, fulfillment networks, and technology stacks, leading to improved scalability and unit economics.
• Successful hyperlocal platforms globally have started with high-frequency categories like food delivery and then expanded into adjacent offerings like fintech, mobility, and travel.

Swiggy's Business Model:

• Swiggy is a consumer-first technology company offering a unified app for food delivery, grocery, restaurant reservations, events bookings, and other hyperlocal services.
• The company is a pioneer in the Indian hyperlocal commerce market, launching food delivery in 2014 and Quick Commerce in 2020.
• Swiggy's unified app approach enables organic scaling by leveraging a common user base, fulfillment network, and technology stack.
• The company has a strong brand recognition and is the most valuable brand in the Consumer Technology & Services Platforms category in India.

Swiggy's Strengths:

• Innovation-led culture: Swiggy actively identifies and addresses user convenience needs, driving frequent interactions on its platform.
• Growing user network: The company has reached 112.73 million users and continues to see consistent growth in its Monthly Transacting Users.
• High user engagement: Users on Swiggy's platform transact more frequently than other hyperlocal commerce players, driven by seamless user experience and a propensity to pay for convenience.
• Unified app with consistent user experience: Swiggy is the only unified app in India that fulfills all food-related missions of urban users, capturing a large share of consumer wallet.
• Preferred choice for partners: Swiggy's scale, unified app, engaged user base, and on-demand delivery network create opportunities for restaurant, merchant, and brand partners.
• Data-driven technology: Swiggy uses data to understand demand patterns, optimize delivery partner allocation, and maximize delivery partner earnings.
• Experienced management team: Swiggy is led by a team of dynamic entrepreneurs and experienced professionals with expertise in consumer technology and hyperlocal commerce.
• Strong corporate governance: Swiggy upholds a robust governance framework that ensures transparency, ethical conduct, and accountability.

Swiggy's Growth Strategies:

• Retain and grow user base: Swiggy plans to expand its offerings, grow its partner network, and provide wider selection and faster delivery times.
• Expand Dark Store footprint and basket sizes for Quick Commerce: The company intends to increase the density of its Quick Commerce network and expand its Dark Store footprint to enable faster deliveries and wider product selection.
• Improve contribution margin: Swiggy aims to scale its operations, expand high-margin offerings, and optimize net delivery costs.
• Invest in technology and last-mile network: The company plans to further innovate its technology stack, expand its cloud architecture, and optimize its delivery network.
• Enhance brand recall and engagement: Swiggy will invest in targeted marketing campaigns, digital advertising, and brand-building initiatives to drive user adoption and engagement.

Swiggy's Business Offerings:

• Food Delivery: Swiggy's flagship offering, providing on-demand food delivery services through a network of restaurant partners and delivery partners.
• Out-of-home Consumption: Includes restaurant dining solutions (Dineout) and access to curated outdoor events (SteppinOut).
• Quick Commerce: Offers on-demand grocery and household items through Instamart, with an average delivery time of approximately 12.6 minutes.
• Supply Chain and Distribution: Provides comprehensive supply chain services to wholesalers and retailers, leveraging warehousing capabilities and brand partnerships.
• Platform Innovations: Incubates new service offerings like Swiggy Genie (product pick-up/drop-off), Swiggy Minis (direct-to-consumer platform for local brands), and private brands.

Swiggy One:

• A membership program offering discounts, promotions, and free delivery on select orders, designed to amplify platform network effects and drive user engagement.

Threats and Challenges:

• Economic and inflationary pressures: Economic downturns and rising inflation could impact discretionary spending on hyperlocal platforms.
• Regulatory and policy risks: Stricter safety regulations and changes in gig economy laws could increase operational costs.
• Competition: Intensified competition from existing players, new entrants, and companies from other sectors could impact business economics, scope, and market positions.
• Rise of other models: Large businesses developing their own apps and delivery services could reduce order volume on third-party platforms.
• Logistics complexity: Efficiently meeting demand across diverse locations can be challenging due to external factors like traffic and weather conditions.
• Ability to add new categories profitably: The profitability of new categories in Quick Commerce is yet to be proven at scale.

Swiggy's Management and Policies: A Summary

This document provides details about Swiggy's management structure, subsidiaries, associates, and key policies.

Management Structure:

• Swiggy has a 10-member Board of Directors, including 2 Executive Directors, 8 Non-Executive Directors, and 4 Independent Directors (including one woman).
• The Board is responsible for overall company direction and includes prominent figures like Sriharsha Majety (Managing Director & Group CEO) and Lakshmi Nandan Reddy Obul (Whole-time Director - Head of Innovation).
• The Board has established various committees to oversee specific areas: Audit, Nomination & Remuneration, Stakeholders Relationship, Risk Management, and Corporate Social Responsibility.

Subsidiaries & Associates:

• Swiggy has two subsidiaries: Scootsy Logistics Private Limited (engaged in delivery services) and Supr Infotech Solutions Private Limited (developing software for food e-commerce).
• Swiggy also has one indirect subsidiary, Lynks Logistics Limited, which was acquired by Scootsy in December 2023.
• Swiggy's associate company is Loyal Hospitality Private Limited, involved in the hospitality and tourism industry.

Key Policies & Agreements:

• Swiggy's Articles of Association limit the number of Directors to 15.
• The company has no holding company.
• There are no material agreements or arrangements with key personnel, directors, or shareholders that are not disclosed in the document.
• Swiggy's directors are not required to hold any qualification shares.
• The document details the remuneration structure for both Executive and Independent Directors, including sitting fees and commissions.
• Swiggy has a clear policy on diversity and the appointment of independent directors.
• The document outlines the borrowing powers of the Board of Directors.

Corporate Governance:

• Swiggy adheres to the requirements of SEBI Listing Regulations and the Companies Act regarding corporate governance.
• The document details the composition and responsibilities of each Board committee.
• Swiggy has a transparent process for identifying and appointing directors and senior management personnel.

Key Managerial Personnel:

• The document provides detailed information about the company's key managerial personnel, including their roles, experience, and remuneration.
• These individuals include the Chief Financial Officer, Company Secretary & Compliance Officer, Chief Growth Officer, Chief Executive Officer – Food Marketplace, Chief Technology Officer, and Chief Human Resources Officer.

This summary provides a comprehensive overview of Swiggy's management and policies, highlighting the key aspects of the company's structure, subsidiaries, associates, and governance practices.

Swiggy Limited: Financial Summary and Analysis

This document provides a comprehensive financial summary and analysis of Swiggy Limited (formerly known as Swiggy Private Limited, Bundl Technologies Private Limited), a leading Indian hyperlocal commerce platform. The analysis is based on the Restated Consolidated Financial Information provided in the document, focusing on key financial metrics, management insights, and market trends.

Note: This analysis is based solely on the provided data and does not include any external information or assumptions.

I. Business Overview

• Core Business: Swiggy operates a multi-faceted hyperlocal commerce platform offering:
  • Food Delivery: On-demand food delivery services through a network of restaurant partners and delivery partners.
  • Instamart: On-demand grocery and household items delivery through a network of merchant partners and delivery partners.
  • Dineout: Restaurant reservation platform.
  • SteppinOut: Event booking platform.
  • Genie: Product pick-up/drop-off services.
  • Swiggy Minis: Other hyperlocal commerce activities.
• Key Revenue Streams:
  • Commissions from restaurant and merchant partners.
  • Advertising revenue from partners and brands.
  • Fees from users and delivery partners for platform usage.
  • Subscription revenue from Swiggy One members.
  • Revenue from sale of goods in the Supply Chain and Distribution business.
• Target Market: Swiggy caters to a broad user base seeking convenience, immediacy, quality, variety, reliability, and consistency in their food, grocery, and other hyperlocal commerce needs.
• Market Position: Swiggy is a pioneer and leader in the Indian hyperlocal commerce market, recognized for its innovation and brand strength.

II. Financial Performance Analysis

A. Revenue Growth and Key Performance Indicators (KPIs)

Segment	3MFY2025 (₹ in million)	3MFY2024 (₹ in million)	FY2024 (₹ in million)	FY2023 (₹ in million)	FY2022 (₹ in million)
Food Delivery	15,153.40	11,926.12	51,601.25	41,299.90	33,913.14
Out-of-home Consumption	458.52	311.25	1,571.86	776.86	-
Quick Commerce	3,740.29	1,797.65	9,785.50	4,513.63	828.43
Supply Chain and Distribution	12,682.57	9,475.81	47,796.05	32,863.47	14,653.00
Platform Innovations	187.39	387.35	1,719.24	3,192.10	7,654.40
Total Revenue from Operations	32,222.17	23,898.18	112,473.90	82,645.96	57,048.97

• Overall Revenue Growth: Swiggy has consistently demonstrated strong revenue growth across all segments.
• Food Delivery: The Food Delivery segment remains the largest contributor to revenue, with significant growth driven by increasing Gross Order Value (GOV), Average Order Value (AOV), and Monthly Transacting Users (MTUs).
• Quick Commerce: The Quick Commerce segment has experienced rapid growth, fueled by expansion into new cities, increased Dark Store network, and rising consumer demand for on-demand grocery delivery.
• Supply Chain and Distribution: This segment has shown substantial growth, driven by expansion into new cities, increased warehouse capacity, and a growing customer base.
• Platform Innovations: This segment has seen a decline in revenue, primarily due to the reduction of the Private Brands business and the integration of Swiggy Mall with Quick Commerce.

B. Key Expenses and Cost Management

Expense Category	3MFY2025 (₹ in million)	3MFY2024 (₹ in million)	FY2024 (₹ in million)	FY2023 (₹ in million)	FY2022 (₹ in million)
Purchases of Stock-in-Trade	11,951.48	8,970.16	45,547.50	33,019.51	22,245.40
Employee Benefits Expense	5,891.85	4,857.80	20,121.64	21,298.20	17,084.90
Advertising and Sales Promotion	4,453.73	4,871.35	18,507.99	25,011.60	20,050.73
Delivery and Related Charges	10,460.45	7,490.01	33,510.59	28,349.44	20,688.13
Technology and Cloud Infrastructure Cost	829.74	794.09	2,956.96	4,135.70	3,279.69
Supply Chain Management Services	1,001.41	743.79	2,551.09	4,074.49	1,395.10
Total Expenses	39,079.58	30,725.64	139,473.84	128,843.99	95,744.53

• Key Expense Drivers: Swiggy's major expenses are driven by its core operations, including purchases of stock-in-trade for its Supply Chain and Distribution business, advertising and sales promotion to acquire and retain users, delivery and related charges for its delivery network, and technology and cloud infrastructure costs for platform development and maintenance.
• Cost Management: Swiggy is actively implementing cost management initiatives to improve operational efficiency and profitability. These initiatives include:
  • Optimizing Dark Store Utilization: Expanding the Dark Store network and streamlining per square foot allocation to reduce fixed costs.
  • Streamlining Delivery Operations: Leveraging its large delivery partner network and implementing innovative cost management initiatives like order batching to reduce delivery costs.
  • Enhancing Advertising Efficiency: Improving advertising tools and leveraging data analytics to run targeted campaigns and increase return on investment.
• Expense as a Percentage of Total Income: Swiggy has successfully reduced its key expenses as a percentage of total income, demonstrating its commitment to cost control and operational efficiency.

C. Profitability Analysis

Metric	3MFY2025 (₹ in million)	3MFY2024 (₹ in million)	FY2024 (₹ in million)	FY2023 (₹ in million)	FY2022 (₹ in million)
Loss Before Tax	(6,110.07)	(5,640.84)	(23,502.43)	(41,793.05)	(36,288.96)
EBITDA	(4,695.09)	(4,553.86)	(18,582.55)	(38,353.27)	(34,104.30)
Adjusted EBITDA	(3,478.00)	(4,868.96)	(18,355.67)	(39,103.37)	(32,337.62)
Return on Net Worth (%)	(8.21)	(6.51)	(30.16)	(46.15)	(29.58)

• Loss Before Tax: Swiggy has consistently reported losses before tax, reflecting its investment in growth and expansion.
• EBITDA: EBITDA provides a measure of profitability before considering non-cash expenses like depreciation and amortization.
• Adjusted EBITDA: Adjusted EBITDA provides a more comprehensive view of profitability by adjusting for other non-operating items.
• Return on Net Worth: This metric indicates the profitability of the company relative to its equity investment.

D. Liquidity and Capital Resources

Metric	As of June 30, 2024 (₹ in million)	As of June 30, 2023 (₹ in million)	As of March 31, 2024 (₹ in million)	As of March 31, 2023 (₹ in million)	As of March 31, 2022 (₹ in million)
Cash and Cash Equivalents	8,364.92	12,202.59	8,870.51	8,325.21	10,961.31
Current Borrowings	1,020.03	-	1,152.09	-	-
Non-Current Borrowings	1,546.08	-	959.77	-	-

• Liquidity: Swiggy has a strong liquidity position, with significant cash and cash equivalents, and access to current borrowings.
• Capital Resources: The company has historically met its capital requirements through cash flows from operations, equity infusions, and borrowings.
• Future Capital Needs: Swiggy may require additional capital to support its growth initiatives, including expansion into new markets, development of new offerings, and potential acquisitions.

E. Key Financial Ratios

Ratio	3MFY2025	3MFY2024	FY2024	FY2023	FY2022
Basic EPS (₹)	(2.76)	(2.58)	(10.70)	(19.33)	(18.62)
Diluted EPS (₹)	(2.76)	(2.58)	(10.70)	(19.33)	(18.62)
Return on Net Worth (%)	(8.21)	(6.51)	(30.16)	(46.15)	(29.58)
Net Asset Value per Equity Share (₹)	33.61	39.61	35.48	41.88	62.96

• EPS: EPS reflects the company's profitability on a per-share basis.
• Return on Net Worth: This ratio measures the company's profitability relative to its equity investment.
• Net Asset Value per Equity Share: This ratio indicates the value of the company's assets per share.

III. Management Insights and Strategy

• Growth Strategy: Swiggy is focused on expanding its user base, increasing order frequency, and enhancing its platform offerings to capture the growing hyperlocal commerce market.
• Cost Management: The company is committed to improving operational efficiency and profitability through initiatives like optimizing Dark Store utilization, streamlining delivery operations, and enhancing advertising efficiency.
• Innovation: Swiggy is a leader in innovation in the hyperlocal commerce space, continuously developing new offerings and features to meet evolving consumer needs.
• Strategic Acquisitions: Swiggy has strategically acquired businesses like Dineout and Lynks Logistics to expand its offerings and market reach.
• Swiggy One Membership: The Swiggy One membership program is a key growth driver, increasing user engagement and loyalty.

IV. Market Trends and Opportunities

• Growing Hyperlocal Commerce Market: The Indian hyperlocal commerce market is experiencing rapid growth, driven by increasing internet penetration, smartphone adoption, and a growing preference for convenience.
• High Growth Potential: The Food Delivery and Quick Commerce categories have significant growth potential, with high frequency, habit formation, and recall value.
• Monetization Opportunities: The hyperlocal commerce market presents opportunities for monetization through ancillary services like advertising, subscriptions, and value-added services.
• Competition: Swiggy faces competition from other players in the hyperlocal commerce space, including Zomato, Amazon, and Reliance.

V. Key Risks and Challenges

• Competition: The hyperlocal commerce market is becoming increasingly competitive, which could impact Swiggy's market share and profitability.
• Regulatory Environment: The regulatory environment for hyperlocal commerce is evolving, which could create uncertainty and potential challenges for Swiggy.
• Operational Efficiency: Maintaining operational efficiency is crucial for Swiggy's profitability, as its business model relies on a large network of delivery partners and Dark Stores.
• Funding Requirements: Swiggy may require additional capital to support its growth initiatives, which could be challenging to secure on favorable terms.

VI. Conclusion

Swiggy is a well-positioned company in the rapidly growing Indian hyperlocal commerce market. The company has demonstrated strong revenue growth, is actively managing costs, and is investing in innovation to maintain its leadership position. However, it faces challenges from competition, regulatory changes, and the need for continued capital investment. Investors should carefully consider these factors before making an investment decision.

Executive Summary: Legal Risk Analysis of Delhivery Limited

This analysis examines the legal risk profile of Delhivery Limited, based on the provided information. It identifies potential legal issues, ambiguities, red flags, and unspoken issues that could impact the company's financial performance and future prospects.

Key Findings:

• Significant Legal Exposure: Delhivery faces a substantial number of legal challenges, including criminal complaints, regulatory actions, and civil disputes. This exposure could lead to significant financial penalties, reputational damage, and operational disruptions.
• High-Risk Business Model: The company's reliance on independent contractors (delivery partners) creates a complex legal landscape. The classification of these partners as independent contractors is under scrutiny, potentially leading to reclassification as employees with associated legal obligations.
• Ambiguous Contractual Relationships: The lack of clarity regarding the contractual relationship between Delhivery and its delivery partners raises concerns about liability and potential disputes.
• Potential for Regulatory Scrutiny: The company's business model and practices are subject to scrutiny by various regulatory bodies, including the Competition Commission of India (CCI), the Food Safety and Standards Authority of India (FSSAI), and the Employees' Provident Fund Organisation (EPFO).
• Financial Impact: The legal risks identified could significantly impact Delhivery's financial performance through:
  • Increased legal expenses: Defending against legal challenges will require significant financial resources.
  • Potential penalties: Fines and penalties imposed by regulatory bodies could erode profitability.
  • Reputational damage: Negative publicity and loss of customer trust could impact revenue.
  • Operational disruptions: Legal challenges could disrupt operations and hinder growth.

Detailed Analysis:

I. Litigation Involving Delhivery:

• Criminal Litigation:
  • Multiple complaints filed against Delhivery and its directors for alleged violations of the Food Safety and Standards Act, 2006, the Indian Penal Code, 1860, and the Information Technology Act, 2000.
  • The outcome of these cases could result in fines, imprisonment, and reputational damage.
• Regulatory Actions:
  • The CCI is investigating Delhivery's business practices for potential violations of the Competition Act, 2002.
  • The FSSAI has issued notices to Delhivery for alleged violations of the Food Safety and Standards Act, 2006.
  • The EPFO is investigating Delhivery's compliance with the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.
  • These investigations could lead to significant penalties and operational disruptions.
• Material Tax Litigation:
  • The Directorate General of Goods and Services Tax Intelligence is investigating Delhivery's GST compliance, potentially leading to substantial tax liabilities.

II. Litigation Involving Subsidiaries:

• Scootsy Logistics Private Limited:
  • Facing a complaint under the Minimum Wages Act, 1948, and notices from the FSSAI for alleged violations of food safety regulations.
• Supr Infotech Solutions Private Limited:
  • Received notices from the EPFO for alleged non-compliance with the Employees' Provident Fund and Miscellaneous Provisions Act, 1952.

III. Litigation Involving Directors:

• Sriharsha Majety and Lakshmi Nandan Reddy Obul:
  • Involved in multiple criminal complaints, including the SIO Litigation and the Kothari Litigation.
• Ashutosh Sharma and Anand Daniel:
  • Involved in the Saisha Hospitality Litigation.
• Sumer Juneja:
  • Involved in the Kothari Litigation.

IV. Ambiguities and Red Flags:

• Classification of Delivery Partners: The document states that delivery partners are not employees, but the EPFO is investigating their classification. This ambiguity could lead to significant legal challenges and financial obligations.
• Contractual Relationships: The document lacks details about the specific terms of the contracts with delivery partners, raising concerns about liability and potential disputes.
• Financial Covenants: The document mentions financial covenants in the borrowing arrangements, but does not provide specific details. This lack of transparency could raise concerns about the company's financial stability and ability to meet its obligations.
• Materiality Threshold: The document states that any litigation exceeding 0.6% of revenue from operations is considered material. However, the document does not provide the revenue figures for the latest financial year, making it difficult to assess the materiality of the disclosed litigations.

V. Unspoken Issues:

• Data Privacy and Security: The document does not mention any legal issues related to data privacy and security, despite the company's reliance on technology and handling of sensitive customer data. This could be a significant risk area in the future.
• Environmental Compliance: The document does not mention any legal issues related to environmental compliance, despite the company's operations potentially impacting the environment. This could be a potential risk area in the future.
• Corporate Governance: The document does not provide details about the company's corporate governance practices, which could be a factor in assessing the company's overall legal risk profile.

Conclusion:

Delhivery faces a complex legal landscape with significant potential risks. The company's business model, reliance on independent contractors, and exposure to regulatory scrutiny create a high-risk environment. The company needs to proactively address these legal challenges to mitigate potential financial and reputational damage.

Swiggy IPO Red Herring Prospectus: Risk Analysis

This analysis focuses on key risks identified in Swiggy's IPO red herring prospectus, highlighting both explicit and implicit threats to the company's future success.

Summary of Key Data Points:

Metric	FY2022	FY2023	FY2024	Three Months Ended June 30, 2023	Three Months Ended June 30, 2024
Swiggy Platform Consolidated Gross Revenue (₹ million)	68,604.44	94,796.89	123,203.14	26,938.48	34,772.87
Swiggy Platform Consolidated Adjusted EBITDA (₹ million)	(32,337.62)	(39,103.37)	(18,355.67)	(4,868.96)	(3,478.00)
Loss for the Period/Year (₹ million)	(36,288.96)	(41,793.05)	(23,502.43)	(5,640.84)	(6,110.07)
Net Cash Used in Operating Activities (₹ million)	(39,003.87)	(40,599.09)	(13,127.35)	(1,737.82)	(5,166.27)
Platform Annual Transacting Users (ATU) (millions)	35.09	43.34	46.84	NA	NA
B2C Platform Frequency Retention by Cohort (Year I)	1.00x	1.00x	1.00x	NA	NA
B2C Platform Frequency Retention by Cohort (Year II)	1.09x	1.12x	NA	NA	NA
B2C Platform Frequency Retention by Cohort (Year III)	1.16x	NA	NA	NA	NA
Swiggy Platform Average Monthly Transacting Delivery Partners	243,496	322,819	392,589	350,280	457,249
Average Delivery Charges Paid per Order to Delivery Partners (₹)	59.23	58.99	56.01	55.98	58.27
Food Delivery Average Monthly Transacting Restaurant Partners	129,036	174,598	196,499	183,138	223,671
Out-of-home Consumption Average Monthly Active Restaurants	-	10,426	26,575	22,889	33,352
Active Dark Stores	301	421	523	421	557
Number of Warehouses as on the End of the Period	32	32	50	31	54
Advertising and Sales Promotion Expenses (₹ million)	20,050.73	25,011.60	18,507.99	4,871.35	4,453.73
Advertising and Sales Promotion Expenses as a Percentage of Total Expenses (%)	20.94%	19.41%	13.27%	15.85%	11.40%
Advertising and Sales Promotion Expenses as a Percentage of Revenue from Operations (%)	35.15%	30.26%	16.46%	20.38%	13.82%
Employee Benefits Expense (₹ million)	17,084.90	21,298.20	20,121.64	4,857.80	5,891.85
Employee Benefits Expense as a Percentage of Total Expenses (%)	17.84%	16.53%	14.43%	15.81%	15.08%
Technology and Cloud Infrastructure Cost (₹ million)	3,279.69	4,135.70	2,956.96	794.09	829.74
Technology and Cloud Infrastructure Cost as a Percentage of Total Other Expenses (%)	6.10%	5.88%	4.32%	5.06%	4.19%
Outsourcing Support (₹ million)	2,814.20	3,243.56	3,787.91	506.77	1,317.62
Supply Chain Management Services (₹ million)	1,395.10	4,074.49	2,551.09	743.79	1,001.41
Payment Gateway (₹ million)	956.26	1,225.41	1,394.35	305.06	403.19
Total Third-Party Related Costs (₹ million)	8,445.25	12,679.16	10,690.31	2,349.71	3,551.96
Third-Party Related Costs as a Percentage of Revenue from Operations (%)	14.80%	15.34%	9.50%	9.83%	11.02%
B2C GOV of Cancellations Due to Technology Related Issues (₹ million)	400.45	446.96	280.69	88.28	75.15
B2C GOV of Cancellations Due to Technology Related Issues as a % of Total B2C GOV	0.20%	0.16%	0.08%	0.11%	0.07%
Coupons Issued for Cancelled Orders (B2C Business) Due to Technology Related Issues (₹ million)	2.11	2.47	6.65	0.78	0.67
Loss of Cash (₹ million)	242.96	221.36	378.93	59.85	46.58
Loss of Cash as a % of Total B2C GOV	0.12%	0.08%	0.11%	0.07%	0.05%
Cash Orders Contribution for Food Delivery and Quick Commerce as a % of Total B2C Orders	16.67%	12.57%	13.31%	12.68%	13.92%
Overall Employee Attrition (Voluntary) Rate (%)	32.69%	33.14%	34.56%	8.61%	8.72%
Overall Employee Attrition (Involuntary) Rate (%)	4.41%	17.35%	19.18%	0.46%	0.67%
Overall Employee Attrition Rate (%)	37.10%	50.49%	53.74%	9.07%	9.39%
Share Based Payments (₹ million)	5,134.15	5,339.52	5,962.62	1,397.46	2,593.14
Related Party Transactions as a Percentage of Revenue from Operations (%)	253.18%	0.93%	2.14%	2.32%	6.55%
Trade Receivables (₹ million)	11,119.32	10,623.49	9,638.50	9,501.66	11,895.90
Number of Dark Stores Open as on the First Day of Each Period	330	330	460	460	538
Number of Dark Stores Opened/Added During the Relevant Period	324	248	220	45	59
Number of Dark Stores Closed During the Relevant Period	6	118	142	61	16
Number of Dark Stores Open as on the Last Day of Each Period	330	460	538	444	581
Active Dark Stores	301	421	523	421	557
% of Number of Dark Stores as on the End of the Period	91.21%	91.52%	97.21%	94.82%	95.87%
No. of Warehouses as on the Beginning of the Period	4	32	32	32	50
No. of Warehouses Opened	29	17	28	0	6
No. of Warehouses Closed	1	17	10	1	2
No. of Warehouses as on the End of the Period	32	32	50	31	54
Cities Where Warehouses are Present at the End of the Period	7	13	12	14	13
Aggregate Amount Involved in Outstanding Litigation (₹ million)	NA	NA	NA	NA	NA
Insurance Coverage on Assets (₹ million)	5,819.75	8,464.58	23,248.52	10,776.29	19,170.56
Insurance Coverage as a Percentage of Property, Plant and Equipment, Cash in Hand and Inventories (%)	176.72%	260.94%	461.51%	294.03%	364.42%
ESOP Pool (Equivalent No. of Equity Shares)	NA	NA	264,159,624	NA	NA
Options Granted (Equivalent No. of Equity Shares)	NA	NA	343,770,859	NA	NA
Options Forfeited/Lapsed/Cancelled (Equivalent No. of Equity Shares)	NA	NA	92,185,863	NA	NA
Options Exercised (Equivalent No. of Equity Shares)	NA	NA	8,964,004	NA	NA
Total Number of Equity Shares that Arose as a Result of Exercise of Options	NA	NA	8,964,004	NA	NA
Options Vested (Including Options that Have Been Exercised)	NA	NA	116,504,764	NA	NA
Total Number of Options Outstanding in Force	NA	NA	231,965,392	NA	NA
Share Based Payments (₹ million)	5,134.15	5,339.52	5,962.62	1,397.46	2,593.14

Explicit Risks:

• Persistent Unprofitability: Swiggy has consistently incurred net losses and negative cash flows from operations since its inception. The company's aggressive growth strategy, fueled by heavy investments in marketing, delivery infrastructure, and employee benefits, has yet to translate into profitability. Continued losses could raise concerns among investors and potentially impact the share price.
• User Acquisition and Retention: Swiggy's business model relies heavily on attracting and retaining users. The company faces intense competition from established players like Zomato and newer entrants in the hyperlocal market. Failure to acquire new users cost-effectively or retain existing ones could significantly impact revenue growth and profitability.
• Delivery Partner Attrition: Swiggy's delivery partner network is crucial for its operations. The company faces challenges in attracting and retaining delivery partners due to competitive pressures, potential for strikes, and evolving regulations. Attrition could lead to service disruptions, higher delivery costs, and ultimately, a negative impact on user experience.
• Restaurant Partner Dependence: Swiggy's success depends on its ability to attract and retain restaurant partners. Competition from other platforms, changes in restaurant partner business models, and potential disputes over pricing and compliance could lead to a decline in the number of restaurants on the platform, impacting food selection and user engagement.
• Dark Store Management: Swiggy's Quick Commerce business relies heavily on its network of Dark Stores. Finding suitable locations, managing lease costs, and ensuring efficient operations are critical. Failure to manage these stores effectively could lead to higher fulfillment costs, reduced sales, and ultimately, a negative impact on the Quick Commerce segment.
• Warehouse Management: Swiggy's Supply Chain and Distribution business relies on its warehouse network. Securing favorable lease terms, managing costs, and ensuring efficient operations are crucial. Failure to manage these warehouses effectively could impact the company's ability to serve wholesalers and retailers, hindering growth strategies.
• Intense Competition: The hyperlocal commerce market in India is highly competitive. Swiggy faces competition from established players and new entrants across its key segments (Food Delivery, Quick Commerce, and Dining Out). Failure to compete effectively could lead to market share loss, reduced margins, and a negative impact on overall business performance.
• Technology Dependence: Swiggy's platform relies heavily on technology. System failures, cybersecurity breaches, and data privacy concerns could disrupt operations, damage the company's reputation, and lead to significant financial losses.
• Brand Reputation: Swiggy's brand is crucial for its success. Negative publicity, regulatory actions, or any perceived shortcomings in its operations could damage the company's reputation, impacting user trust and ultimately, business growth.
• Limited Operating Experience: Swiggy has limited experience operating its business at its current scale and complexity, particularly in its newer segments like Quick Commerce and Out-of-home Consumption. Failure to manage this growth effectively could lead to unforeseen challenges and impact future performance.
• Net Proceeds Deployment: Swiggy's proposed use of net proceeds from the IPO is based on management estimates. Delays, cost overruns, or unforeseen challenges in implementing these plans could impact the company's growth trajectory and financial performance.
• Contingent Liabilities: Swiggy has contingent liabilities related to tax demands and legal claims. If these liabilities materialize, they could significantly impact the company's financial condition and results of operations.
• Related Party Transactions: Swiggy has entered into related party transactions, which could potentially involve conflicts of interest. Failure to manage these transactions effectively could raise concerns among investors and impact the company's reputation.
• Statutory Dues Compliance: Swiggy has experienced delays in paying statutory dues in the past. Failure to comply with these obligations in the future could lead to penalties and negatively impact the company's financial performance.
• Open Source Software: Swiggy's platform incorporates open source software. The terms of these licenses could impose unexpected restrictions or obligations, potentially impacting the company's ability to develop and license its technologies.

Implicit Risks:

• Regulatory Uncertainty: The hyperlocal commerce sector in India is subject to evolving regulations. New laws or changes in existing regulations could impose significant compliance burdens, increase costs, and potentially restrict Swiggy's operations.
• Macroeconomic Volatility: Swiggy's business is sensitive to macroeconomic conditions in India. Economic slowdowns, inflation, or currency fluctuations could impact consumer spending, affecting demand for Swiggy's services and ultimately, the company's financial performance.
• Employee Retention: Swiggy's growth requires attracting and retaining talented employees. Failure to do so could hinder the company's ability to innovate, manage operations effectively, and maintain its competitive edge.
• Third-Party Dependence: Swiggy relies heavily on third-party providers for various aspects of its operations. Disruptions in service, performance issues, or changes in pricing by these providers could negatively impact Swiggy's business.
• Fraud and Illegal Activity: Swiggy's platform faces risks related to fraudulent transactions and illegal activities. Failure to effectively prevent and mitigate these risks could damage the company's reputation and expose it to significant financial losses.
• Market Saturation: The hyperlocal commerce market in India is growing rapidly, but it is also becoming increasingly saturated. If the market reaches a point of saturation, Swiggy's growth potential could be limited.
• Shifting User Preferences: Consumer preferences are constantly evolving. Swiggy's ability to adapt to these changes and offer services that meet evolving user needs will be crucial for its long-term success.

Conclusion:

Swiggy's IPO red herring prospectus highlights a number of significant risks that investors should carefully consider before making an investment decision. While the company has achieved impressive growth, its profitability remains a concern. The company's dependence on third-party providers, its exposure to regulatory uncertainty, and the competitive nature of the hyperlocal commerce market all pose potential challenges to Swiggy's future success. Investors should carefully evaluate these risks and assess whether Swiggy's potential rewards outweigh the inherent dangers.

This document outlines the proposed use of funds raised through an Initial Public Offering (IPO) by Swiggy, a leading hyperlocal commerce platform in India. The document focuses on the "Basis of the IPO Price" section, explaining the factors considered in determining the price range for the IPO.

Use of IPO Proceeds:

• Strategic Acquisitions and Investments: Swiggy intends to utilize a portion of the IPO proceeds (up to ₹[●] million) for strategic acquisitions and investments. These acquisitions will focus on companies that can enhance Swiggy's reach, engagement, monetization opportunities, expertise, and geographical reach.
• General Corporate Purposes: Up to 25% of the IPO proceeds will be used for general corporate purposes, including capital expenditure, rental and administrative expenses, working capital requirements, new product development, and meeting exigencies.

IPO Price Determination:

• Qualitative Factors: Swiggy's IPO price will be determined based on qualitative factors, including its pioneering status in the hyperlocal commerce industry, its consistently growing user network, rising user engagement, strong brand recognition, a preferred choice for partners, and an experienced management team.
• Quantitative Factors: Quantitative factors considered include:
  • Basic and Diluted Earnings Per Share (EPS): Swiggy's EPS has been negative in recent years, but the company is expecting growth in the future.
  • Price/Earnings (P/E) Ratio: The P/E ratio will be calculated based on the IPO price range and the company's EPS.
  • Industry Peer Group P/E Ratio: Swiggy will compare its P/E ratio to that of its listed peers, such as Zomato Limited.
  • Return on Net Worth (RoNW): Swiggy's RoNW has been negative in recent years, but the company is expecting improvement in the future.
  • Net Asset Value (NAV) per Equity Share: Swiggy's NAV will be calculated based on the IPO price range and the company's net worth.
  • Key Performance Indicators (KPIs): Swiggy will use a variety of KPIs to track its financial and operating performance, including total orders, GOV (Gross Order Value), gross revenue, adjusted EBITDA, average monthly transacting users, and average monthly transacting delivery partners.

Comparison with Listed Peers:

• Swiggy will compare its financial ratios and KPIs to those of its listed peers, such as Zomato Limited. However, the document acknowledges that there may be differences in the definitions and calculations used by different companies, making direct comparisons difficult.

Monitoring and Disclosure:

• Swiggy has appointed [●] as the monitoring agency to oversee the utilization of the IPO proceeds.
• The company will disclose the utilization of the IPO proceeds on a quarterly and annual basis, including any deviations from the stated objects.

Other Confirmations:

• No part of the IPO proceeds will be paid to Swiggy's directors, key management personnel (KMPs), or group companies.
• The majority of the IPO proceeds will be used for purposes other than capital expenditure.

Offer Expenses:

• The total estimated offer expenses are approximately ₹[] million.
• These expenses will be shared between Swiggy and the selling shareholders on a pro rata basis.

Overall, the document provides a detailed overview of Swiggy's plans for utilizing the IPO proceeds and the factors considered in determining the IPO price range. The document also highlights the importance of transparency and accountability in the utilization of the funds.