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Can Swiggy Replicate Zomato’s Success On The Bourses?
- Swiggy is eyeing a $15B valuation but its financials and losses are raising concern among analysts and investors, leading to cold feet.
- Swiggy has approval to increase the size of its fresh issue to INR 5,000 Cr from INR 3,750 Cr, bringing its expected total IPO size to more than INR 10,000 Cr.
- Swiggy is far behind Zomato in the market share race, with Zomato holding a 55% market share and Swiggy the rest.
- Zomato’s market performance was influenced by business-specific reasons and negative market sentiment, but Swiggy’s IPO concerns cannot be completely shaken off.
- Swiggy has yet to match Zomato’s performance in the quick commerce business despite posting GOV of INR 8,068.6 Cr in quick commerce and Zomato’s Blinkit clocking INR 12,469 Cr in FY24 GOV.
- Swiggy’s total food delivery gross order value (GOV) is INR 24,717 Cr in FY24 while Zomato’s is INR 32,224 Cr. Zomato also reported stronger growth with its GOV rising by 20% year-on-year compared to Swiggy’s 15% YoY increase.
- HSBC Global Research recently noted that Swiggy has outperformed Zomato in average order value (AOV) in food delivery over the past year, but Bernstein notes that “the debate on Zomato vs Swiggy is beyond comparing metrics.”
- Swiggy's unlisted shares are trading at INR 485-INR 515 zone in the grey market. Two months ago, its shares were trading at INR 425 apiece.
- Mehta Equities anticipates Swiggy to achieve profitability in the coming months on the back of a sustainable platform fee.
- Analysts see sufficient demand in the market for Swiggy’s IPO, but a valuation discount will only heighten interest in its public offering.
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