Swiggy , India's leading food delivery and quick commerce platform, is gearing up for a significant capital infusion as its board prepares to consider raising ₹10,000 crore through a qualified institutional placement (QIP) or other modes. This move comes as the company reports strong growth in its quick commerce segment, despite widening losses in the recent quarter.

Financial Performance

Swiggy's financial results for the September quarter reveal a mixed picture:

The company's quick commerce segment, which includes its Instamart service, has shown remarkable growth, doubling its revenue year-over-year to ₹980.00 crore.

Quick Commerce Momentum

Swiggy's quick commerce business has been a key driver of growth:

• The segment reported over 100% year-on-year growth in Gross Order Value (GOV) for the third consecutive quarter.
• Non-grocery categories have expanded significantly, now accounting for 26% of quick commerce GOV, up from 9% a year ago.
• The company's store network has the capacity to double its current order volume, indicating strong potential for future growth.

Strategic Initiatives

Swiggy has implemented several strategies to boost its quick commerce business:

• Launched the 'Quick India Movement' sale event to showcase its expanded product range beyond groceries.
• Introduced a separate app for Instamart, which has been effective in acquiring new customers, especially in newer cities.
• Focused on improving store utilization and operational efficiency, with plans to densify its network in existing cities rather than expanding to new ones in the near term.

Fundraising Plans

The proposed ₹10,000 crore fundraise, if approved, would significantly strengthen Swiggy's balance sheet. The company intends to use these funds for:

• Supporting growth initiatives, particularly in the quick commerce segment
• Investing in innovation and potential new business opportunities
• Building strategic reserves to maintain competitiveness in a rapidly evolving market

Market Position

Despite the widening losses, Swiggy's shares closed at ₹405.75, remaining above the IPO price of ₹390.00. However, the stock is down 25% for the year, reflecting broader market sentiments and concerns about profitability in the food delivery and quick commerce sectors.

Looking Ahead

Swiggy aims to achieve contribution margin profitability in its quick commerce business by the June 2026 quarter. The company's management expressed confidence in the long-term potential of the quick commerce segment, projecting that it could eventually reach a 4% EBITDA margin with a 7% contribution margin.

As Swiggy continues to invest in growth and innovation, the proposed fundraise could play a crucial role in solidifying its market position and driving the company towards sustainable profitability in the competitive quick commerce landscape.

Swiggy , India's leading food delivery and quick commerce platform, has reported robust quarterly results, showcasing impressive growth in its quick commerce business. The company's Instamart division achieved a remarkable 110% increase in gross order value (GOV), signaling strong consumer adoption and market expansion.

Instamart's Rapid Growth and Profitability Path

Swiggy's quick commerce arm, Instamart, has made significant strides towards profitability. The division improved its contribution margins by 200 basis points, reaching negative 2.6%. This improvement brings Instamart closer to its target of achieving profitability by June 2026.

Food Delivery Maintains Strong Performance

While quick commerce stole the spotlight, Swiggy's food delivery business continued to perform strongly. The segment saw an improvement in EBITDA margins by 44 basis points quarter-on-quarter, underlining the company's ability to enhance profitability across its diverse offerings.

Expanding Beyond Groceries

A key highlight of Swiggy's performance was the significant expansion of non-grocery categories within its quick commerce mix. These categories grew from 9% to 26% of the quick commerce mix over the past year, driven by the company's Quick India Movement initiative. This diversification strategy appears to be paying off, broadening Swiggy's appeal and potentially increasing customer retention.

Operational Efficiency and Future Growth

Swiggy's management highlighted that the current store network can support double the current order volume, indicating significant room for growth without proportional increases in infrastructure costs. Notably, 25% of stores are now operating at positive contribution margins, a promising sign for the company's path to profitability.

Capital Raise on the Horizon

Swiggy is seeking board approval for a Qualified Institutional Placement (QIP). This capital raise could provide the company with additional resources to maintain its competitive positioning in both food delivery and quick commerce segments.

Looking Ahead

Swiggy's management expects to demonstrate contribution margin profitability in quick commerce by June 2026. The company's focus on balancing growth with improving unit economics appears to be yielding results, positioning Swiggy strongly in the competitive Indian e-commerce landscape.

As the quick commerce sector continues to evolve, Swiggy's performance this quarter suggests it is well-positioned to capitalize on the growing demand for fast, convenient delivery services across a widening range of product categories.