Food and grocery delivery companies Eternal (formerly Zomato) and Swiggy together added a whopping Rs 30,590 crore ($3.6 billion) in market capitalisation in just five trading sessions this week from June 2 to June 6, data available on the National Stock Exchange (NSE) at the end of day’s trading showed.
Among the two companies, Eternal led the charge by adding Rs 20,217.48 crore ($2.4 billion) in market capitalisation. Swiggy, on the other hand, added another Rs 10,373.57 crore ($1.2 billion) in market capitalisation this week.
Market capitalisation estimates the company’s value by multiplying the share price into the number of available shares. This week, Swiggy’s share prices increased 12 percent to change hands at around Rs 372 apiece on the NSE. Similarly, Eternal’s share prices were up 8.6 percent this week to trade at Rs 261.9 apiece on the NSE.
The two publicly listed companies, which have been arch rivals for over a decade, saw gains during a week when their key rival, Zepto, had a busy week.
Quick commerce unicorn Zepto, which was earlier slated to go public in 2025, has pushed out its IPO plans into 2026 after investors asked the company to increase revenues and reduce cash burn, Moneycontrol had exclusively reported earlier in the week.
The delayed entry of a third player increases the chances of investors, looking for exposure to the space, to bet on existing companies.
Amid chances of a delayed public market debut, several brands have expressed displeasure with Zepto’s ways of working. Earlier this week, Zepto sent out a memo to its sellers informing them that the platform will now auto-activate ad campaigns for inactive brands, a move that did not go down too well with its partners as it forces them to advertise on the platform.
The auto-activation move came a few weeks after Zepto began testing a ‘swap and buy’ feature which sellers said puts their brands on the backfoot versus other companies.
Zepto also grabbed the spotlight with a flurry of other activities. The Maharashtra Food and Drug Administration (FDA) suspended Zepto’s food license in Dharavi, Zepto’s workers were striking over reduced payout in Hyderabad and the pausing of Zepto Cafe in 44 locations in the Delhi NCR belt have all tipped investor sentiment in the favour of Eternal’s Blinkit and Swiggy’s Instamart.
Analysts are bullish
To be sure, the hiccups at Zepto were not the only reason behind the gains at Eternal and Swiggy.
On June 4, Morgan Stanley initiated coverage on Swiggy with an ‘overweight’ rating which further sent investor sentiment soaring. Morgan Stanley is also part of Zepto’s IPO syndicate, as reported by Moneycontrol earlier.
The brokerage’s investment thesis hinges on three key pillars: Swiggy’s strengthening performance in food delivery, the large and growing addressable market in quick commerce, and a mismatch between investor assumptions on capital outlay versus top line growth.
Morgan Stanley also added that quick commerce, as an industry, will grow to $57 billion by 2030 in size, up from an earlier estimate of $42 billion, which will benefit the entire industry.
Companies were seen capitalising on the growing demand. CLSA, citing Sensor Tower data, said Blinkit and Instamart on a year-to-date (YTD) basis added 9.3 million and 8.2 million weekly active users, respectively.
Zepto and JioMart, on the other hand, added 3.4 million and 3 million active users.
While quick commerce market leader Blinkit continues to cement its position as the top player, Zepto will look to remain the second-largest player in the space and fresh fund infusion to the tune of $700 million from Avenir and General Catalyst will likely help the company grow further. Swiggy on the other hand will look to boost its quick commerce business with profits that it generates from a growing food delivery business.
With inputs from Ravindra Sonavane.
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