Blinkit CEO Albinder Dhindsa warns of qcom shakeout amid capital crunch

Zomato in 2024 had raised ₹8,500 cr via QIP

The quick commerce (qcom) sector in India is heading towards a sharp correction as companies run low on cash, and aggressive fundraising becomes apparent, said Albinder Dhindsa, the chief executive officer (CEO) of the country’s largest qcom platform, Blinkit.

 

Signalling a shakeout in the sector, he said companies will soon be forced to confront how long they can continue absorbing steep losses. “Usually when this kind of imbalance exists, the correction is very swift. It often catches people by surprise,” Dhindsa said while speaking to Bloomberg. “The pendulum has already swung once from skepticism to exuberance. Whether the correction comes in three months or six months or next week, I do not know, but it will come,” he added.

 

The comments come on the same day as competitor Swiggy launches its qualified institutional placement (QIP), through which it plans to raise ~10,000 crore. It’s also a period when another rival, Zepto, has converted to a public company and plans to raise funds via an initial public offering (IPO) next year.

 

Notably, in November last year, Zomato itself had raised ~8,500 crore through QIP at a floor price of ~265.91 per share. In the case of Swiggy, the company has set a floor price of ~390.51 per share. Additionally, Eternal, the parent company of Zomato, has also infused ~600 crore in the company’s qcom vertical.

 

According to filings, Swiggy intends to use majority of the proceeds, ~4,475 crore for expansion and operations of its qcom  fulfilment network, about ~2,340 crore for brand marketing and business promotion, and ~985 crore in technology.

 

In FY25, the consolidated cash balance for Swiggy stood at ~6,695 crore, compared to ~5,370 crore in FY24. In the case of Eternal, the closing cash balance in Q2FY26 was at 18,314 crore, compared to ~18,857 crore in the previous quarter.

 

However, investors and analysts shared mixed views as qcom firms raise capital aggressively amid expansion plans. Aakash Agrawal, head of digital & new age business, Anand Rathi Investment Banking, said that in any space where capital inflow is high and fast, there can be concerns of overcapitalisation and lack of profitability. However, he added that public companies have the appetite to raise high capital, and that is one of the benefits of being a listed company.

 

On the other hand, angel investor Lloyd Mathias said, “A lot of the qcom success depends on the low cost of labor, which continues, but the high cost is often in terms of the dark stores, and I think that cost is going to catch up. So, investors are sooner or later going to be looking at possible returns, and that will, to my mind, force consolidation. Whether we will have six to seven players as there is today, going forward, it seems tight, and therefore, I would think that the correction is coming.”

 

Echoing Mathias’ views, Kushal Bhagia, founder and partner at All in Capital, said, “The sector is clearly overheating. Despite Blinkit being the market leader with over 60 per cent share, Instamart and Zepto are competing aggressively, and new entrants like Amazon, Flipkart, Jio, and BigBasket are entering, which creates a long tail of four to five well-capitalised companies all chasing the same opportunity. Given this context, having seven players in the market is unrealistic. At best, maybe two or three can survive. What’s telling is that even the leader, Blinkit, is only marginally profitable. There’s only so much that public markets will tolerate before unit economics have to meaningfully show up — especially for players ranked second or third.” All In Capital has invested $1.4 million in qcom pharma firm Plazza.