Swiggy, the popular food delivery service and rival to Zomato, is currently under scrutiny after revealing a significant embezzlement case. The company disclosed that a former junior employee allegedly stole over ₹33 crore (approximately $4 million) from one of its subsidiaries. This incident comes as Swiggy gears up for its Initial Public Offering (IPO).
Embezzlement Details
In its annual report for the financial year 2023-24, Swiggy mentioned discovering the embezzlement of ₹326.76 crore. The company has launched an investigation with an external team and has filed a legal complaint against the individual involved. However, the name of the accused was not disclosed in the report.
According to the report, the company has accounted for the embezzled amount as an expense for the fiscal year ending March 31, 2024. This disclosure raises concerns about corporate governance within the company, particularly about how a junior employee could execute such a large-scale fraud without detection.
IPO Plans
Despite the scandal, Swiggy is moving forward with its IPO plans. In April, the company filed its draft documents confidentially, aiming to raise up to ₹3,750 crore (about $450 million) through new shares and an additional ₹6,664 crore (around $800 million) through an offer-for-sale (OFS). This brings the total IPO size to approximately $1.25 billion.
Financial Performance
Swiggy’s financial performance showed improvement despite the embezzlement issue. The company reported a net loss of ₹2,350 crore for the last fiscal year (FY24), which is a 44% reduction from ₹4,179 crore in FY23. Revenue grew by 36% to ₹11,247 crore in FY24, compared to ₹8,265 crore in the previous year.
The company’s gross order value (GOV) increased by 26% year-on-year, reaching $4.2 billion, with around 14.3 million monthly transacting users. The report highlighted that profitability has significantly improved year-on-year, noting that the peak of investments in Instamart is behind them and that the business continues to grow rapidly.
Looking Ahead
As Swiggy prepares for its IPO, the company will need to address the embezzlement scandal and reassure investors of its governance and internal controls. The upcoming IPO and the company’s financial growth will be closely watched by stakeholders and the market.
