Swiggy Faces Financial Struggles and Competitive Challenges; Stock Downgraded by JM Financial
India’s leading food delivery and quick commerce platform, Swiggy, has been downgraded to “Reduce” by JM Financial, which cut its price target to ₹440 and issued a bearish outlook on Monday, September 22, 2025. The brokerage cited Swiggy’s deteriorating cash position and intensifying competition in the quick commerce segment as critical concerns for investors.
Deteriorating Financial Health Raises Concerns.
JM Financial highlighted a substantial depletion of Swiggy’s cash reserves, with net liquidity dropping sharply from ₹8,130 crore in December 2024 to an estimated ₹4,350 crore by September 2025, excluding proceeds from ongoing asset sales. This rapid cash burn of nearly ₹4,000 crore in just nine months signals mounting pressure on the company’s financial sustainability. Over the past nine quarters, Swiggy has accumulated losses exceeding ₹6,600 crore—which significantly outpaces the ₹4,400 crore raised during its November 2024 IPO. This widening loss trajectory has prompted caution among investors, as reflected in early trading which saw Swiggy’s stock price fall over 3% to ₹447, breaking its six-day run of gains.
Challenges in the Quick Commerce Race
Swiggy’s Instamart quick commerce arm faces intense competitive pressures, particularly from Rival Blinkit, which is aggressively expanding. JM Financial’s channel checks revealed a sharp decline in Instamart’s expansion pace, with just 40-50 new dark stores added per quarter compared to a peak of 316 stores in early 2025. Blinkit, by contrast, plans to double its store count in the medium term and is opening 200-250 stores quarterly, holding a dominant 44% market share compared to Instamart’s 23%. Analysts warn that Swiggy’s slower expansion risks significant market share loss in this rapidly growing segment, valued at roughly $6 billion in India and forecasted to surge to $100 billion by 2035.
Rapido Stake Sale Insufficient to Close Capital Gap
To bolster its cash reserves, Swiggy is reportedly planning to sell its 12% stake in the ride-hailing platform Rapido. However, JM Financial estimates that the potential $320 million (₹2,900 crore) from this sale will fall short of the over $500 million war chest Swiggy needs to sustain its quick commerce growth. While Swiggy aims to raise ₹2,500 crore from the stake sale—delivering a 2.5x return on its initial ₹950 crore investment in Rapido—the brokerage views this capital as inadequate for the capital-intensive nature of rapid store expansion and marketing spend.
Market Sentiment and Future Outlook
The downgrade sparked bearish sentiment among retail investors and analysts, further weighing on Swiggy’s stock which has underperformed broader market indices with a 17.4% decline year-to-date. JM Financial projects that Swiggy’s cash outflows will remain high until late fiscal 2027, despite management’s guidance that Instamart could reach contribution margin breakeven sooner. The brokerage cautions that until capital constraints are addressed with a stronger war chest or operational turnaround, Swiggy’s shares are unlikely to provide meaningful returns.
Swiggy’s challenges stand in stark contrast to competitor Zomato, which successfully recapitalized itself in 2024 while maintaining healthier financials. As India’s quick commerce market heats up with new entrants like Amazon and Flipkart, Swiggy faces a critical juncture to secure sustainable growth and investor confidence.
In summary, investors should watch Swiggy’s financial strategy closely in the coming months, particularly on cash flow management, asset sales, and competitive positioning in the crucial quick commerce segment.
This development highlights the high-stakes and capital-intensive nature of scaling quick commerce in India’s fast-evolving digital economy.