BS EDIT: Swiggy IPO debuts strong, but competition looms large

By Business StandardPublished On Nov 14, 2024

A solid market debut

Swiggy’s IPO saw strong demand, with retail subscription at 1.14 times and institutional at six times. The stock rose 17% after listing at an 8% premium

Where Swiggy’s funds will go

Swiggy’s Rs 11,327 cr IPO includes Rs 6,828 cr equity sale and Rs 4,499 cr fresh issue. Funds go to dark stores (26%), promotion, tech, and expenses

Battle for qcom mkt share

Swiggy & Zomato lead in food delivery; Blinkit dominates qcom. Despite its first-mover advantage, Swiggy faces tough competition from Zepto, Flipkart & Amazon

Zomato vs Swiggy

In FY24, Zomato made Rs 351 cr profit, while Swiggy faced a Rs 2,350 cr loss. Swiggy has an integrated app and higher GOV per user despite weaker finances

Rising competition threatens margins

New entrants like Flipkart, Amazon, Reliance, and Big Basket are intensifying qcom competition. Low margins make profitability tough despite strong demand

Valuation & investor concerns

Swiggy’s post-IPO valuation is Rs 1.02 trillion vs Zomato’s Rs 2.27 trillion. Intense competition and low margins make a strong market position costly to build