Swiggy Uncovers Rs 33 Crore Fraud by Ex-Employee, Takes Legal Action
As Swiggy prepares for its highly anticipated initial public offering (IPO), the food delivery giant disclosed a case of large-scale embezzlement involving one of its former junior employees. According to the company’s 2023-24 annual report, the employee allegedly siphoned off Rs 33 crore (Rs 326.76 million) from one of Swiggy’s subsidiaries over multiple financial periods.
Swiggy launched an internal investigation, aided by an external team, to uncover the details of the fraud. The company has since filed a legal complaint against the former employee, though their name was not mentioned in the annual report. Swiggy has recorded the embezzled amount as an expense for the fiscal year ending March 31, 2024.
Corporate Governance Concerns Ahead of $1.25 Billion IPO
The news of this embezzlement has raised concerns about corporate governance as Swiggy works toward its IPO. The company confidentially filed its draft IPO documents in April and aims to raise Rs 3,750 crore (approximately $450 million) through a fresh issue of shares, along with Rs 6,664 crore (around $800 million) via an offer-for-sale (OFS). This puts the total IPO target at a significant $1.25 billion.
Swiggy’s Financials: Losses Decrease, Revenue Increases
Despite the embezzlement, Swiggy’s financial performance in FY24 has shown signs of improvement. The company reported a net loss of Rs 2,350 crore for the fiscal year, marking a 44% reduction from the Rs 4,179 crore loss in FY23. Swiggy’s revenue for FY24 increased by 36%, rising to Rs 11,247 crore from Rs 8,265 crore in the previous year.
Swiggy’s gross order value (GOV) reached $4.2 billion, up 26% year-on-year, with about 14.3 million monthly active users. The report also highlighted the company’s path to profitability, attributing reduced losses to lower investments in its quick-commerce division, Instamart, and continued growth in its core food delivery business.
Looking Ahead
As Swiggy moves closer to its IPO, the company will be focused on addressing corporate governance issues while capitalizing on its improved financial performance. The embezzlement case underscores the need for tighter internal controls, but Swiggy’s strong revenue growth and reduced losses are likely to bolster investor confidence as it prepares for its stock market debut.
