Eternal's shares declined 4.5% due to the company's decision to limit foreign shareholding to 49.5%, potentially triggering significant selling by overseas passive funds. Nuvama Alternative & Quantitative Research estimates outflows ranging from $820 million to $1.3 billion as MSCI and FTSE benchmarks reduce the stock's weightage. This shift stems from Eternal's move to become an Indian Owned & Controlled Company.
Urban mobility startup Rapido more than doubled its gross order value to $1.25 billion in FY25, driven by new services. However, rising cash burn has pushed it further from profitability. Rapido is now preparing to enter food delivery, hiring from rivals and engaging with major QSR brands and cloud kitchens.
Swiggy's quick-commerce venture, Instamart, is facing significant financial challenges, with substantial losses despite growth in gross order value. Investors are expressing concerns as Swiggy's shares decline, prompting analysts to lower target prices due to intense competition and cash burn. While the company aims for profitability, it needs to improve its financial performance to regain investor confidence.
Zomato is introducing a "long distance service fee" for deliveries beyond 4 km, potentially straining relationships with restaurant partners who fear commission increases up to 45%. Restaurants are considering protesting the new fees and revised agreements, which include penalties for price disparities and encouraging off-platform orders.
As of the March quarter-end, foreign ownership in Eternal stood at 44.8%. Commenting on recent market activity, Vivek Maheshwari of Jefferies noted, “Given the stock’s upward movement and increased volumes since the last shareholding disclosure, we believe FPI holding may have risen to around 46%.”
Uber is set to introduce B2B logistics through the ONDC network, initially focusing on food deliveries before expanding to other sectors like e-commerce and healthcare. This move follows similar initiatives by Ola and Magicpin in the food and beverage segment.
Zomato Gold subscribers will now face surge fees during rainy weather, effective May 16th, impacting a previously waived benefit. This adjustment follows Zomato's pause of its 50:50 refund-sharing policy with restaurants. While free delivery within 7km and dining discounts remain, the added rain surcharge could increase order costs. Rival Swiggy already implements similar fees, suggesting a potential industry trend.
In QC segment, while each of firms reported more than 2-fold rise in GOV and revenue, Zomato's QC service Blinkit outshone Swiggy's Instamart. "Instamart continues to lag Blinkit in growth and incremental unit economics," said Anand Rathi Research.
Zomato's Blinkit and Swiggy's Instamart face heightened competition in the quick commerce sector, impacting profitability. Both companies invested heavily in network expansion in quick commerce, leading to increased adjusted Ebitda losses. Blinkit maintains its lead but anticipates continued margin pressure, while Instamart aims to reduce losses despite analysts' concerns about cash burn.
Swiggy is banking on its 10-minute food delivery service, Bolt, to boost growth and market share in the food delivery sector, despite Zomato's exit from a similar venture. Bolt contributes 12% to Swiggy's food delivery volumes, with the company highlighting improved user retention through the platform. However, increased spending on quick commerce has widened Swiggy's net losses.
InfoEdge saw 36% returns from startup investments since 2007, while its AIF investments yielded 18.7% returns. The company invested Rs 3,959.16 crore, now with a fair value of Rs 36,855 crore. InfoEdge invested in 111 companies, of which 76 companies received follow-on investments. Oldest investments Zomato and Policybazaar have matured recently, and Bluestone Jewellery has filed for listing.
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