Swiggy expresses concerns over ONDC, intensified competition, and economic pressure
Swiggy has posted its revenue from operations at Rs 3,222.21 crore in the first quarter of FY25 against Rs 2,389.81 crore reported in the corresponding quarter of FY2024
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Food aggregator and delivery platform Swiggy, which submitted an updated draft red herring prospectus (DRHP) to the Securities and Exchange Board of India (Sebi), expressed ONDC as a threat.
In the DRHP, Swiggy said that large businesses can develop their own apps and delivery services to bypass third-party platforms. Successful execution of this trend could reduce the volume of orders on these platforms as customers might prefer ordering directly from these businesses.
"The emergence of models like Open Network for Digital Commerce (ONDC) is an example of this trend by allowingbusinesses to connect directly with consumers, bypassing third-party intermediaries," Swiggy mentioned in the DRHP.
ONDC is an initiative by the Indian government to promote an open e-commerce network that connects shoppers, platforms, and retailers.
Apart from ONDC, Swiggy said that intensified competition from existing players, new entrants, and companies from other sectors leveraging their existing capabilities for certain hyperlocal services like Quick Commerce can raise competitive intensity.
Further, according to Swiggy, economic and inflationary pressure could limit disposable income, impacting some discretionary spending on Hyperlocal Platforms.
Swiggy has posted its revenue from operations at Rs 3,222.21 crore in the first quarter of FY25 against Rs 2,389.81 crore reported in the corresponding quarter of FY2024.
The food delivery aggregator’s total liabilities were reported at Rs 2,896.25 crore in Q1FY25, against Rs 2,526.26 crore reported in Q1FY24.
However, the Bengaluru-headquartered company's net loss narrowed to Rs 2,350 crore in FY2024, from a loss of Rs 4,179 crore in fiscal 2023.
Swiggy is looking to raise Rs 3,750 crore by issuing fresh shares and offers for sale with shareholders offloading up to 185,286,265 equity shares of the company.
According to Swiggy, the net proceeds towards the funding will be utilized for the investment in Scootsy- a material subsidiary of the company; investment in technology and cloud infrastructure; brand marketing and business promotion and funding in inorganics growth through unidentified acquisitions and general corporate purposes.
