Zomato’s stock took a hit, falling by 2.98% to ₹282.95 on the BSE after reports surfaced that its key rival, Swiggy, received approval from SEBI to launch its IPO. Swiggy is aiming to raise ₹11,000 crore, with a ₹5,000 crore fresh issue, intensifying the competitive landscape between the two food delivery giants.
What’s Happening? 🍽️
- Swiggy’s IPO Plan: After filing confidentially in April, Swiggy is moving forward with plans for a public offering, stirring up the market. Backed by SoftBank and Accel, Swiggy was valued at $9.3 billion in August 2023.
- Instamart Focus: Swiggy’s grocery delivery service, Instamart, has become a core focus, though it remains loss-making, with 550 warehouses across 35 Indian cities.
Zomato’s Reaction 💼
- Zomato, led by Deepinder Goyal, has been on a stellar run in 2024, with shares rallying 131% year-to-date and an impressive 192% over the last 12 months. However, Swiggy’s IPO could impact its momentum.
- Aswath Damodaran, the valuation expert, recently acknowledged that he underestimated Zomato’s potential, with its stock now trading around ₹250, far higher than his original ₹42 valuation at listing.
#Zomato delivery based selling in full form.
— Learner Vivek Bajaj (@vivbajaj) July 26, 2022
Humble warning to all retail investors it's not just a 42 rupee stock, but 34500 crore market cap.
We really don't know how much will it get slashed further. Bottom fishing is very high risk. pic.twitter.com/MMQc7rA3bf
What’s Next? 🚀
With Swiggy set to enter the public markets and its competitor Zomato continuing its upward trajectory, the food delivery battle is heating up in India. Instamart will be a key driver for Swiggy’s growth, while Zomato benefits from its Blinkit acquisition and the growing dining-out trend in India.
Stay tuned as these food delivery giants continue to redefine the landscape! 🍔