Invesco cuts Swiggy’s valuation to $5.5 bn from $8.2 bn

The valuation of the world’s largest food delivery company and India’s online food platform, Swiggy, has significantly decreased, according to regulatory filings by investment firm Invesco. The US asset management significantly reduced Swiggy’s valuation from $8.2 billion to $5.5 billion. As of January 31, 2023, Invesco valued Swiggy’s shares at $3,305, down from $4,759 in October 2022 when the business had earlier modified the share value due to a more significant downturn in the global technology market. The value of Invesco’s portfolio is determined by market participants, according to regulatory filings. According to the asset manager, unobservable inputs may be utilized in instances where quoted prices or observable inputs are unavailable if they are based on the best information and assumptions about how to determine fair value. The market circumstances and elements that market participants are taking into account are reflected in these modifications. Since going public in 2021, Zomato, Swiggy’s major rival, has also encountered difficulties. Since Zomato went public over two years ago, its shares have dropped by 48%. Zomato’s shares on the Bombay Stock Exchange (BSE) closed on Monday at Rs 64.89 per share.

NewsOTG gathered that the valuation of Swiggy has now been decreased twice by Invesco. It was revealed in April that Invesco had reduced its Swiggy investment by 23%. The most recent cut comes after one in July of last year when the valuation was set at $6,212 per share, or $8.2 billion overall. After Zomato’s successful IPO in January of last year, Swiggy previously raised $700 million by boosting its value. The Bengaluru-based business’s valuation rose to $10.7 billion over that time. The recent downgrade by Invesco, however, suggests a changed evaluation of Swiggy’s value in the present market environment. Swiggy has been dealing with additional difficulties, such as a slowdown in its primary food delivery business that resulted in the firing of 380 employees. According to HSBC Global Research, Zomato has benefited from this circumstance by relaunching its reward program, Zomato Gold, and regaining market share. Additionally, in terms of gross merchandise value (GMV), Zomato’s grocery delivery service, Blinkit, has overtaken Swiggy’s rapid commerce division, Instamart. According to a trading firm called Jefferies, Instamart had a GMV of $257 million in the first half of 2022 and Blinkit had a GMV of $270 million.

The gourmet grocery delivery business Handpicked was recently shut down by Swiggy, which also announced changes to its management. In April, Instamart’s CEO Karthik Gurumurthy resigned, and Swiggy co-founder Phani Kishan Addepalli took over. In addition, senior VP Madhusudan Rao has taken over for departing CTO Dale Vaz at the business. Invesco’s valuation adjustment for Swiggy is a result of the market downturn and growing competition. The updated number reflects the market dynamics and difficulties the food delivery sector is currently facing.