Swiggy and Zomato were already rivals in the food delivery business in India. After this, Swiggy started 'Instamart' and Zomato started 'BlinkIt' service and then both the companies became rivals of each other in the quick commerce delivery segment. Now that Swiggy is going to hit the stock market with its IPO worth more than Rs 10,000 crore, then it is very important to know where it stands today in comparison to its main rival company Zomato. It has been almost 3 years since Zomato launched its IPO.
If we look at it according to market capitalization, then the valuation of Zomato as on date is Rs 2.45 lakh crore. Whereas Swiggy is expecting a valuation of Rs 84,000 crore to Rs 1.09 lakh crore through IPO. In such a situation, Swiggy is still about 55 to 65 percent smaller company than Zomato.
For investors who have invested in both Zomato and Swiggy, as of today, quick commerce delivery is a more futuristic business than food delivery. Apart from Zepto, Tata Group and Reliance Industries are also making big bets in this segment. If we look at the earnings figures from these two businesses of Zomato and Swiggy, we will understand the fundamentals of both.
Growth and Business Size: According to the data of the first quarter (April-June) of the financial year 2024-25, Swiggy is 23 percent smaller than Zomato in the food delivery segment. Whereas in the quick commerce segment, the size of Swiggy is 57 percent less than that of Zomato.
If we look at the growth of both these businesses, then Swiggy's growth in food delivery business is 14 percent. Whereas Zomato's 27 percent growth is in gross order value. Whereas in the quick commerce segment, Swiggy's growth on the basis of gross order value has been 56 percent. Whereas Zomato's growth has been 130 percent.
Earnings calculation: If we compare the earnings of both the companies, then according to an ET news, Swiggy's gross revenue from food delivery business has been Rs 1,730 crore, while Zomato's revenue has been Rs 2,256 crore. Similarly, Swiggy's revenue from quick commerce is Rs 403 crore and Zomato's revenue is Rs 942 crore.
If we look at the gross revenue of both the companies, during this period, Swiggy's revenue was Rs 3,477 crore and Zomato's revenue was Rs 4,520 crore. Even in terms of profit, Zomato's food delivery business generates 5.4 times the profit of Swiggy, whereas in the quick commerce business it is about to reach the break even point. Whereas Swiggy is incurring loss in this.
Only new shares worth Rs 3,750 crore are to be issued in Swiggy's IPO. The existing shareholders of the remaining company are preparing to exit the company by selling their shares. In this way the company is going to get only Rs 3,750 crore for growth. Out of this money, the company has planned to open a dark store for quick commerce with Rs 1,120 crore. And Rs 930 crore has been kept for brand promotion and marketing. The remaining Rs 1,701 crore is for corporate expenses.
After knowing this complete information, you can plan to invest in Swiggy's IPO. Risk remains in the stock market.
