Baron Capital Slashed Swiggy’s Valuation by 40%: What Does Its Future Hold?

The food delivery market in India has grown exponentially in the last few years. Although there are many apps, only a few are the top dogs. Swiggy is one of them and in recent times the company has faced backlash from some asset management firms too. Baron Capital, An American company, slashed Swiggy’s evaluation by almost 40 per cent to $7.1 billion in December 2022.

Baron Capital is an asset management firm which is well known for its long-term holding strategies in growth equity investment. Typically, they hold a particular share for at least 4-5 years and sometimes 10-11 years and then sell it on a profit. Now, Baron Capital has evaluated Swiggy and given it a valuation that is almost 40 per cent less than the original evaluation. The evaluation went from $10.7 billion to $6.5 billion.

As we all know there is no Swiggy share price on the NSE as Swiggy is not yet listed on any stock market. This means that if you want to buy Swiggy’s share then you’ll have to do it through the market. The Current  Swiggy share price in the unlisted share market is ₹348 per equity share.

How Will Swiggy’s Be Affected By The Valuation

Swiggy is one of the major players in the Indian food and groceries delivery scene. It has made a name for itself which has helped it in its share market prices. Since the initial slashing of valuation, Swiggy’s share price has increased.  Swiggy share price was ₹280 when the December valuation came out and now the price is ₹348.  This shows that even after the downgrading of the company valuation, Swiggy share price kept rising.

As of now, Swiggy is not listed anywhere and neither has it applied a DRHP to the SEC yet. This means that the only thing Swiggy share price depends on is its operational revenue and other financial metrics.

The company’s financial metrics show that Swiggy is performing well everywhere. Its revenue increased from ₹2547 crore in 2021 to ₹5705 crore in 2022. This was well reflected in Swiggy’s share prices which have increased almost 25% in the last 10 months. As of 2022, the market share of Swiggy in India was a whopping 54% while its biggest competitor, Zomato’s market share is 45 %. Due to these factors, Swiggy can perform better in the market even after reports like that of Baron Capital.

How Does The Future Look For Swiggy

At the time when Swiggy was introduced to the Indian market, there wasn’t much competition or many competitors but with time many new businesses came to market and created a somewhat competitive environment. However, to this very day, the only competitor of Swiggy is, Zomato.

The future of Swiggy doesn’t seem problematic at all. You see, even after the reports, there isn’t any downfall in Swiggy share prices. Baron Capital isn’t the only firm that has devalued Swiggy. Invesco has also devalued Swiggy to $7.8 billion.

Swiggy’s performance from a financial standpoint only seems to get better as time passes. There is always neck-to-neck competition between Zomato and Swiggy but still, Swiggy share prices are rising.

In the unlisted share market, the only thing that can affect your share value is bad performance in terms of finance. From the past reports, it can be seen that Swiggy is on its way up as none of the parameters through which a company’s status is measured are wrong with the company. The company’s financial metrics like revenue, EBITDA and PAT are somewhat good compared to last year.

What Should Investors Keep In Mind

Swiggy is a very big company and it has proven that it has the potential to overcome its problems and challenges. Still, as an investor, you need to consider a few things before buying Swiggy unlisted shares or any company for that matter.

Before investing in any company you should read their disclosed documents about their financial performance in the last few years. Shares are priced according to the company’s financial performance in the past years, So it can be beneficial for you to read those documents. Swiggy is a promising company and buying Swiggy unlisted shares can be a good thing but only if you do it right. You must go through the company’s financial reports before investing.

If you want to buy unlisted shares and can’t find the required reports then you should try trusted online trading platforms like Stockify. People here will provide you with the best support possible, and it will also help you evaluate your investment. You can buy unlisted shares through Stockify without any problems as it is one of the best online trading platforms in the market today.

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