Swiggy Board Approves INR 10,000 Crore Fundraising Plan to Tackle Growing Competition

The food delivery service Swiggy, based in Bengaluru, said on November 7 that its board had authorised the funding of up to INR 10,000 crore through private or public offers, including qualified institutions placement (QIP) or other acceptable methods. Subject to regulatory and shareholder clearances, the business stated in a filing to the Bombay Stock Exchange (BSE) that the financing would be conducted in one or more tranches.

By issuing stock shares or other instruments as allowed by the relevant legislation, the money will be raised. This comes after the business declared last week that it was thinking about raising more money in light of the competitive and changing external environment.

The Step is Taken to Combat Tough Competition

Swiggy's move coincides with increased rivalry in the quick commerce and food delivery markets. Last month, rival Zepto secured $450 million, or roughly INR 4,000 crore, at a $7 billion valuation, solidifying its place in the q-commerce sector. With a cash balance of INR 2,400 crore after selling its interest in the bike-taxi platform Rapido, Swiggy stated that it is still confident in its financial situation.

However, the external competitive environment is dynamic, and both established and emerging companies continue to draw capital to the industry, Swiggy stated in a statement to shareholders. This has prompted a discussion with the board about further fundraising, which will improve our strategic flexibility and provide us with access to adequate growth resources. The action shows that Swiggy is focused on keeping up with the competition in the delivery and e-commerce space as it gets ready to grow and possibly go public.

Zepto Giving Tough Run to Blinkit and Instamart

Weeks after concluding a $450 million investment round, the quick commerce platform Zepto has lowered the minimum order amount to INR 99 for free delivery and eliminated the handling fee and surge charge that are assessed to its customers for each order. The company is promoting "zero handling fee", "zero delivery fee (for orders over INR 99)", and "zero rain and surge charge" on its app under the banner of its "All new Zepto experience".

When it came to handling the products in customers' orders at their locations, Zepto used to charge a handling fee. In a similar vein, extra charges—like a rain fee—are used to reward delivery partners. Each order from rival Blinkit incurs a handling cost of INR 11 and a delivery fee of INR 30 for orders under INR 199. For orders under INR 199, Instamart charges a handling fee of INR 9.8 and a delivery fee of INR 30.

This is in addition to other fees and charges that are applied to each order during busy hours, like the surge and rain fees. The Bengaluru-based business has now established itself as the lowest-priced fast commerce platform. Zepto's $450 million round, which included both main and secondary transactions, increased its cash reserves to $900 million, according to an October 16 ET story. Analysts predict that as platforms concentrate on growing and cutting prices, this will heighten competitiveness and the industry's capital burn.