| Wednesday, 12 November 2025 |
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Good morning [%first_name |Dear Reader%],
It’s a bad look for a listed company to raise a truckload of money merely a year after it did just that. No amount of “spin” can help it avoid that.
Frankly, Swiggy, the food-and-grocery-delivery company, didn’t even try in the shareholders’ letter accompanying its September-quarter results.
With the current cash balance (to be further bolstered by the Rs 2,400 crore Rapido divestment), we feel comfortable about our overall balance sheet strength, and are well-funded for our growth ambitions.
The external competitive environment is dynamic, and legacy and new players continue to attract investments to the sector. This has necessitated a conversation with the Board to consider an additional fund raise which will give us access to sufficient growth capital while enhancing our strategic flexibility.
Last week, the board approved a qualified institutional placement for Rs 10,000 crore, more than twice the amount investors gave Swiggy in its initial public offering.
The quick-commerce market leader, Blinkit has a cash-rich parent in Eternal, which foresaw the internecine competition and raised Rs 8,500 crore before Swiggy went public. The only difference is that Eternal didn’t “need” to go to investors when it did—it was sitting on almost Rs 11,000 crore at the time—while Swiggy has no other option right now.
What will only add to investors’ scepticism is that, even after the fundraise, Swiggy’s balance sheet won’t look quite as hardy as Eternal’s.
| Source: Bernstein |
Swiggy’s shares are now worth no more than they were at the time of the IPO. Eternal was then valued at 2.5X as much as Swiggy. Now, the gap is 3X.
That’s partly a consequence of the fact that Blinkit, despite being much bigger than Swiggy Instamart, still continues to outgrow the latter by a big margin. Bernstein, a brokerage, pegs Instamart’s valuation at roughly Rs 55,000 crore (Swiggy’s current market value is Rs 90,000 crore), which is a quarter of what it thinks Blinkit is worth.
Swiggy has another problem, though.
In this financial year, Swiggy’s biggest business will not be delivering food or groceries. It will be selling to wholesalers and retailers and providing them with warehousing and shipping services. When it was the market leader in food delivery and the pioneer in instant grocery delivery, Swiggy’s reputation rested on its exceptional logistics chops that allowed it to deliver different products.
So, managing 4.2 million sq ft of warehousing space across 24 cities and working with 94,000 retailers and distributors is a logical extension of that strength.
But Hyperpure, Eternal’s grocery-supplies venture, isn’t as important to it as the B2B vertical is to Swiggy.
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