Swiggy needs $500 mn war chest for quick commerce battle: JM Financial

JM Financial downgraded Swiggy citing widening losses and balance sheet stress, warning the firm needs over $500 million to sustain Instamart against Blinkit's rapid expansion

Food and grocery delivery platform Swiggy requires a fundraising round exceeding $500 million to sustain its Instamart quick commerce division amid intensifying competition from Zomato’s Blinkit service, according to JM Financial analysts. They warned that the company’s current financial resources are inadequate for the capital-intensive market battle ahead.

 

“Despite Instamart delivering 100 per cent-plus year-on-year gross order value (GOV) growth in recent quarters, it has been losing relative share to Blinkit, as the latter expanded 130 per cent-plus,” said JM Financial. “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.”

 

The investment firm said Swiggy’s consideration of selling its 12 per cent stake in ride-hailing startup Rapido would generate a maximum of $320 million pre-tax — far short of the funding needed, as the company faces a “fast depleting cash balance” while rival Blinkit plans to double its store count.

 

The analysts downgraded Swiggy to “reduce” from “hold,” citing balance sheet concerns and competitive positioning challenges.

 

Swiggy posted a consolidated net loss of Rs 1,197 crore in Q1 FY26, nearly doubling from Rs 611 crore in the same period last year. Losses also rose sequentially from Rs 1,081 crore in Q4 FY25. The widening loss was attributed to a sharp 60 per cent increase in total expenses, which climbed to Rs 6,244 crore during the quarter.

 

This came despite a significant 52 per cent year-on-year rise in revenue from operations, which reached Rs 5,048 crore, up from Rs 3,310 crore a year earlier. Sequentially, revenue rose 11.4 per cent from Rs 4,531 crore.

 

Swiggy shares declined as much as 2.7 per cent to a session low of Rs 446 on the NSE Monday, following the downgrade by JM Financial. The brokerage set a price target of Rs 440, indicating a potential 4 per cent downside from the stock’s previous close of Rs 458.