Who is stronger Swiggy or Zomato?
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 to each other in the fast commercial delivery segment. Now that Swiggy is going to hit the stock market with its IPO worth over Rs 10,000 crore, it is very important to know where it stands today compared to its main rival Zomato. It has been almost 3 years since Zomato launched its IPO.
If we look at it based on market capitalization, then Zomato’s valuation as on date is Rs 2.45 lakh crore. While Swiggy is expecting a valuation of Rs 84,000 crore to Rs 1.09 lakh crore through the IPO. In such a situation, Swiggy remains a 55-65 per cent smaller company than Zomato.
What do the profit figures say?
For investors who have invested in both Zomato and Swiggy, fast commercial delivery is a more futuristic business than food delivery today. Apart from Zepto, Tata Group and Reliance Industries are also making big bets in this segment. If we look at the profit figures of these two businesses of Zomato and Swiggy, we will understand the fundamentals of both.
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Business growth and size: As per data for the first quarter (April-June) of fiscal 2024-25, Swiggy is 23 per cent smaller than Zomato in the food delivery segment. While in the quick commerce segment, Swiggy’s size is 57 percent smaller than Zomato.
If we look at the growth of both the businesses, then Swiggy’s growth in the food delivery business is 14 percent. While Zomato’s 27 percent growth is due to gross order value. While in the fast commerce segment, Swiggy’s growth on the basis of gross order value was 56 per cent. While Zomato’s growth has been 130 percent.
Income account: If we compare the profits of both the companies, according to a news report in ET, Swiggy’s gross revenue from the 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 profits, Zomato’s food delivery business generates 5.4 times more profits than Swiggy, while in the quick commerce business it is close to breaking even. While Swiggy is suffering losses due to this.
What will Swiggy do with the IPO money?
Only new shares worth Rs 3,750 crore will be issued in Swiggy’s IPO. The current shareholders of the remaining company are preparing to exit the company by selling their shares. This way, the company will get only Rs 3,750 crore to grow. With this money, the company plans to open a dark store for fast trading with Rs 1.12 billion. And Rs 930 crore has been set aside for brand promotion and marketing. The remaining Rs 1,701 crore is earmarked for corporate expenses.
After knowing this complete information, you can plan to invest in Swiggy IPO. Risk remains in the stock market.
