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Will Swiggy Retain Its Market Value in the Longer Run

Swiggy's IPO has generated significant interest, with shares listed at a premium after being oversubscribed 3.59 times, primarily by institutional investors. Despite a strong revenue growth of 40% in FY 2023, Swiggy faced a net loss of ₹1,575 crore due to high operational expenses, raising concerns about long-term profitability compared to competitors like Zomato. The company's diverse service offerings, including food delivery and quick commerce, present both opportunities and challenges in maintaining market value.

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5 views1 page

Will Swiggy Retain Its Market Value in the Longer Run

Swiggy's IPO has generated significant interest, with shares listed at a premium after being oversubscribed 3.59 times, primarily by institutional investors. Despite a strong revenue growth of 40% in FY 2023, Swiggy faced a net loss of ₹1,575 crore due to high operational expenses, raising concerns about long-term profitability compared to competitors like Zomato. The company's diverse service offerings, including food delivery and quick commerce, present both opportunities and challenges in maintaining market value.

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info.walkeducate
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Will Swiggy Retain Its Market Value

in the Longer Run?

New Delhi: In recent times swiggy's report of IPO has been trending in India for
their share price for their market competition, their proper plan doesn’t know
anyone but if you take a look at their past news their IPO is trending in the news
and the market Shares of Swiggy in focus. The stock closed nearly 8% lower on
Thursday. On the listing day, Swiggy shares ended the trading session at ₹454 on
NSE, nearly a 17 percent premium over the IPO price of ₹390, and at ₹455.95 on
BSE, a 16.9 percent premium.
Swiggy’s ₹11,300-crore-IPO was subscribed 3.59 times primarily driven by interest
from institutional investors. The shares were listed on bourses at a nearly 8
percent premium. Swiggy’s revenue model spans multiple verticals, including its
core food delivery service, Swiggy Instamart (grocery delivery), and Swiggy Genie
(parcel delivery). This diverse service portfolio has helped Swiggy generate a gross
revenue of ₹5,705 crore in the fiscal year 2023, representing a year-over-year
growth of 40%. Swiggy Instamart alone contributed over ₹1,500 crore to Swiggy’s
overall revenue, showcasing strong traction in the quick-commerce grocery
sector.
However, this broad approach comes with challenges. Swiggy’s operational
expenses reached ₹7,280 crore in FY 2023, resulting in a net loss of ₹1,575 crore,
a slight improvement from ₹1,850 crore in FY 2022. While Swiggy’s diversified
model spreads risk, it also requires heavy capital investment, and the quick
commerce segment, in particular, has yet to show consistent profitability.
Running into the Swiggy IPO, a key point of debate was the difference in growth
rate with its close peer Zomato. For example, in Q1 FY25, Zomato’s year-on-year
revenue growth rate at 62 percent was much stronger than Swiggy’s 34 percent.
The difference was also notable when one considers the booming quick
commerce segment, where Zomato’s 130 percent growth was way above
Swiggy’s 89 percent.

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