Breaking the “jinx” of confidential IPO filings: Swiggy’s Sriharsha Majety on running a newly listed company

“We were the third company to take this, and we went third time lucky. And then, there was the big IPO jinx which said that large IPOs normally don't do well and they haven't made examples. Happy to have broken that," Majety said.

The Securities and Exchange Board of India (Sebi) allows companies to make confidential filings for a share sale. These companies must put their final red herring prospectus only ahead of the IPO after seeking approval.

Swiggy made its debut on the bourses on 13 November, aiming to raise ₹11,300 crore at a valuation of $11.3 billion, lower than its initial anticipation of $15 billion due to market volatility and the lacklustre debut of Hyundai India weighing on investor sentiment. It is currently trading at a premium of 11% over its listing price of ₹420 on the National Stock Exchange (NSE). The company offered shares for sale in the price band of ₹371-390.

Swiggy said it noticed a concerted “inorganic" sentiment on social media against the company in the run up to its IPO, Majety said while describing some challenges the company faced before listing.

This comes as negative marketing on social media is on the rise as many small- and mid-sized startups seek to put down rivals, Mint reported last month. Such marketing can be of various types, although campaigns orchestrated through paid social media posts are most common, including highlighting a rival’s drawbacks.

Roughly two weeks after the company went public, Swiggy’s Majety spoke to Mint about the differences between running a public and private company, the impact of negative social media campaigns, and how Majety’s quieter personality is perceived among a bunch of more flamboyant founders.

Edited excerpts:

Sriharsha, it’s been two weeks since the listing. What’s different for you?

So, it’s been a little over two weeks since we went public. I have been asked by folks in my apartment about how it must be (like) catching your breath. Honestly, the listing feels like a distant memory. I mean, life feels normal. If anything, I think the whole company is running high on energy and intensity because we feel good about how the business is progressing and we're just building on the momentum. It's a new phase of our journey. So, there's excitement.

But honestly, I can't tell what post-public means yet. We're still going through the motions. We've just finished two weeks. Then we'll have our earnings call soon. So, we're still learning it all.

A lot more companies are going public and some of them say they experienced concerted negative campaigns which wasn’t the case 5-10 years ago. Did Swiggy face anything similar?

I think there are multiple sentiment barometers that one has to look into in the build-up to the IPO. One of them is, of course, the feedback from institutional investors. We did 100-plus meetings. Got feedback, acted on it. We were feeling good about how the funds overall were feeling about Swiggy.

And then there was a whole overall macro company sentiment. And social media, as you rightly mentioned, is not the same beast that it was 5-10 years back. So, there's always some kind of sentiment. Even leading up to the IPO or after the IPO, I was asked how the sentiment wasn't great, but the stock still ended on a high.

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Deep down, we knew what the institutional interest here was. And there were times in which the sentiment felt like it wasn't fully organic. Sometimes you see the same exact copy and paste thing being poured over maybe by the dozens in various [social media] handles, etc. I think it's all new for us as a company. It was just interesting, amusing, call it what you will, to know where this was coming from? What was going on here? So, there were moments, definitely, when parts of it didn't feel organic.

Swiggy had opted for the confidential IPO filing route. Do you think you were spared a lot of public scrutiny because of this decision?

The reasons to file confidentially were multiple. It wasn't keeping this scrutiny or action in mind. It was just that Sebi overall was taking slightly longer periods. We weren't clear about how long we needed to engage with Sebi to get to the next step. And for us, we appreciated the option to not have our overall numbers and strategy out there in the public domain. From a competition-sensitive standpoint, more than anything else, for longer than it needed to be.

We took the road less travelled. If you think about it, there were a bunch of jinxes that we were told about including the confidential IPO jinx. Hopefully, we've broken them.

We were the third company to take this, and we went third-time lucky. And then, there was the big IPO jinx saying that large IPOs normally don't do well. We’re happy to have broken that.

We thought that if the engagement with Sebi is going to take a few months, we may as well start the process early and have only an adequate amount of time for numbers and strategy to be out there. As you know, it's an incredibly competitive landscape.

What’s your biggest piece of advice for founders looking to take their company public?

I think we followed the book in many ways and engaged extensively with all the institutional stakeholders. For us, what was new was the growing class of retail investors in the country. We also had to go [with] our entire management team and travel to various big cities in the country as a part of the roadshow.

My only advice from an IPO standpoint is that the flows in the equity markets are changing and while institutional is a big part, retail is also increasing in importance in the overall mix. You have to be equitable in your attention to all investors.

Do you feel that there is some pressure on startup founders to be aggressive and more out there and do you see it impacting company valuations in any way?

I actually don’t know how it will impact company valuations. As for startup founders, being aggressive and being seen as aggressive, they're all different things. Obviously, as a founder, if you're not aggressive and ambitious, you can't go after big things.

You have to take risks; you have to go after new horizons. So, in general, you will have to be aggressive and ambitious as a founder to be able to make stuff happen.

Look, when we talk about connections between these two like stock prices, etc., I actually think that the way we've operated is the absolute majority of how companies in India or even if you take startups in India operate. So, we're just looking at our heroes and our role models to see how they have operated.

And we don't see any big difference in that. I think all the doyens of the industry, all the who's who like the people who run the biggest companies today, take Rahul Bhatia of IndiGo, maybe take a Gopal Vittal of Airtel. I don't know how they've seen us. They’re all just good business people who run large franchises. And none of these cases have any people who have become bigger than the company.

We can pick up the Nifty 50 and look at how many CEOs and founders are out there. Honestly, I think we are in the 95% of the overall listed entities or large companies in the world. Ultimately, you have to be authentic to your true self. You can't be prescriptive saying this is exactly how one needs to be.

The quick commerce industry is cut-throat. With players like Zepto growing fast and overtaking Swiggy in some markets, according to some reports, does it put pressure on Swiggy as a listed company?

No pressure at all. I think it just increases our need to explain, because unfortunately, the reporting standards for public companies and private companies in India are different. So, there's a lot more (to it) than meets the eye.

For example, it's not an overall financial picture like one would get when we share our earnings. Swiggy and Blinkit are publicly listed companies, which just means that you get an overall financial picture.

And sometimes you don't have to deal with cherry-picked numbers. That just makes it a lot more confusing, and we just need to make sure that we keep communicating for clarity. Even previously when I was asked, I said that I really can't have a proper rational conversation unless the full numbers are out there.

Everything is like picking a part of this, picking a part of that. It's just unfortunate there is no level-playing field between private companies and public companies.

How do you see the competitiveness in the industry playing out? What are some things beyond the business that you’re trying to figure?

I think we're still scratching the surface. So much is yet to be played out. It’s still early days.

So, we're going to keep at it, definitely be competitive, invest in the future, invest in the experience. There will be 3-4 players on the other side of these four years when a very large market breaks out. We feel very good about our own position, and we just keep making improvements to get the business to an even stronger place.

Have you consulted your investors on how to handle selective information being given out by some competitors?

We just need to be communicating even more. Beyond that, I think it's not like some specific exercise that we need help from investors. The investors are always there to help. All it means is that we need to just communicate, communicate and communicate. That's all.

Swiggy is an official sponsor of Shark Tank. Do you plan to join the team of sharks?

We're an official corporate sponsor for Shark Tank. I don't think it means that one of us should be there on the show. If anybody is willing to sit under Swiggy branding, they are welcome to do so.

What is your top priority every morning?

We have three businesses at different stages and need different levels of innovation, execution, operating excellence, and strategies to get further ahead. For us, the key will be to continuously create new consumption occasions, innovate on behalf of customers, and keep growing the monthly transacting base at a healthy clip.

In Instamart, the job to be done is very different. I think we're going through geography expansion, category expansion, user expansion. All this while scaling gracefully, continuously improving the customer experience, and continuously catching the next wave or the next big trend. Quick commerce will be key.

I think the job to be done for each of these categories is very different and it will be very hard to crystallize it in one way. If you have to oversimplify, we’re just trying to be better every day.

After your recent pilot in e-pharmacy and 10-minute food delivery, what do you think will be the next convenience-led trend?

One can only take a few informed bets on this. If you look at what we're doing even outside of the three businesses, there's a pilot going on for a new service offering called Rare, which is again convenience led. It's in private beta right now.

It's primarily an exclusive private members’ concierge that also gives you exclusive access to events and the community, hinged on hyper convenience for a slightly narrower audience than the overall Swiggy audience.

So, everything that you've seen us do in the past and will see us do in the future is going to keep speaking to our mission statement. Either a new vertical that offers huge convenience to a large set of users, or maybe it could even be something more horizontal, like Rare, where it can cut across multiple categories but offer hyper convenience.

Have 10-minute food deliveries (Bolt) been hard to execute?

Nothing awesome comes easy. It is hard. A lot of learnings from the quick commerce business have been leveraged into the 10-minute food delivery business.

And there's quick feedback. A lot of partners are excited and are actually working backwards and changing even some of their processes to be able to ship faster and prepare faster, sometimes by having separate lines for Bolt orders in the kitchen. So, I think product market fit is quite clear and evident.

And as for competition, we don't know a world without it. In everything we've done. So, there will be exciting markets, we'll get competed with and we'll compete.

Swish, which raised seed funding last week, uses a modified cloud kitchens model to fulfil deliveries in 10 minutes. Do you see Swiggy reconsidering cloud kitchens to cut down delivery time?

It’s not like cloud kitchens can help with faster deliveries than kitchens that serve customers. In 10-minute food deliveries, it is a selection game. I don't think all your food needs can be handled by one brand. That's just not how we believe it works.

In fact, if you fire up the app in the central parts of the big cities that are our major demand centres, you will find reels and reels of restaurants you can choose from. Of course, a restaurant chooses a portion of their menu, but on an overall selection basis, the consumer has access to multiple brands that do different things. You can get samosas, chai, ice creams, burgers, etc.

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So, I think that the selection, from an overall availability and selection standpoint, is a superior offering. Our job is to continuously work with partners to keep figuring out ways to shave off the prep time, whether it is through capacity expansion or priority allocation.

One of the criticisms that comes up is that Swiggy needs to execute faster. Have you thought of how you are going to solve that?

I don’t understand the criticism. You have to look around and see how much has happened. Even if you look at the last quarter, a bunch of things have been at play. It's not by accident that you become the fastest quick commerce delivery player.

We’re innovating in pharmacy; we’re innovating on Bolt. So honestly, I think nobody's perfect, and everyone needs to just keep getting better. For example, Bolt went from concept to launch in 30 days. Even in pharma, from the get-go from an agreement with PharmEasy to being able to launch that, it was less than a couple of months. I think we have a great thing going.

It can be a lonely world out there for founders because not many of them find sounding boards or people who can understand what they are going through.

Do you seek help to be able to open up?

I think founders can be lonely, but we have other founders. So ultimately, we all have to build these safe spaces, bubbles, ecosystems, where you can ask for help and get help. Each of them may help in different ways.

I actively ask for help. Without help, I don't think we would have gotten here. We're not going to go into the future. We're not complete. We don't know everything about every single challenge that is facing us. My co-founder ecosystem, my management ecosystem, my founder friends, my family, all of these things make it easier. Without that, it can be quite punishing.

What are the things you indulge in to reset and rewind?

I think my biggest reset and energy source is time with the family. I think constantly and keep creating energy sources to deal with stress in all forms of life.

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