Swiggy, the food and grocery delivery company, may need to raise over $500 million (Rs 4,400 crore) to sustain and grow Instamart, its quick commerce business, in an increasingly competitive environment, according to analysts at JM Financial.
These comments from the brokerage firm come at a time when Swiggy faces intensifying pressure on its balance sheet. The Bengaluru-based firm has reported widening losses for five consecutive quarters, with net losses of Rs 2,278 crore ($268 million) in the last two reported quarters. Over the past nine quarters, cumulative losses have crossed Rs 6,600 crore ($785 million), depleting the company’s cash reserves.
As of the June quarter (Q1FY26), Swiggy held cash and equivalents of Rs 5,354 crore.
The company is looking to further increase its cash balance by selling its stake in Rapido for Rs 2,000-2,500 crore, Moneycontrol had exclusively reported on August 6.
However, even if the Rapido deal goes through at the desired price, “Swiggy is fast depleting its cash balance and there are growing competitive threats, it needs to take cues from its larger peer, which recapitalised itself last year despite no visible signs of balance sheet concerns,” the analysts said in a note released on September 20.
Instamart is among the top three quick commerce players in the country. While Eternal-owned Blinkit is the top player, Instamart and Zepto keep switching between the second and third spots.
To be sure, Instamart has grown over 100 percent on a year-on-year (YoY) basis.
“...despite Instamart delivering 100%+ YoY gross order value (GOV) growth in recent quarters, it has been losing relative share to Blinkit, as the latter expanded 130%+,” the note said.
“With Blinkit’s guidance suggesting plans to double its store count over the medium term, we believe Instamart’s curbed expansion strategy runs the risk of meaningfully falling behind its more ambitious competition. We, therefore, reiterate that Swiggy needs a much larger fund-raise, of (over) $500 million, to support its long-term ambitions in quick commerce,” the note added.
As it happens, Swiggy's largest private market rival Zepto is also stitching together a round as large as $500 million, Moneycontrol had exclusively reported.
Swiggy’s share price was down 2.85% at Rs 448 apiece on the BSE as of 12:10 pm on September 20.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
