Indian food delivery giant Swiggy witnessed its stock plummet below its initial public offering (IPO) price, reflecting a changing market sentiment toward the company. On Thursday, Swiggy's shares fell to ₹374.80 ($4.29), below the IPO price of ₹390 set in November. This decline marks a significant contrast to its mid-December peak of ₹617, highlighting investor concerns over the company's competitive standing in the quick-commerce sector.
Swiggy's quick-commerce division, Instamart, recorded a quarterly gross order value of ₹39.1 billion ($446 million). However, this figure is notably lower than Blinkit's quarterly gross order value of ₹78 billion ($890 million), which nearly doubles Instamart's performance. On an annualized basis, Instamart's gross order value reached $1.8 billion, trailing both Blinkit's $3.7 billion and competitor Zepto's $3 billion.
The competitive landscape is intense, with Bank of America analysts forecasting sustained competition among quick-commerce firms through mid-2025. To bolster its market position, Swiggy expanded its reach by adding 96 dark stores in the quarter, bringing its total to 705 locations nationwide. In comparison, Blinkit added 216 stores, reaching 1,007 locations, while Zepto quietly expanded its network to over 950 stores.
Despite the challenges, Swiggy managed to increase its average order value in the quick-commerce segment by 7%, reaching ₹534 ($6.10) compared to the previous quarter. However, the company's cash reserves stand at ₹82 billion ($936 million), less than half of Zomato's ₹190 billion ($2.2 billion), which may impact its ability to sustain aggressive expansion.
The stock market's reaction to Swiggy's performance underscores a shift in investor sentiment since the company staged the world's largest tech IPO last year. This change also comes in the wake of Zepto raising $1.35 billion last year, further intensifying competition in the sector.
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