Stock market regulator SEBI (Securities and Exchange Board of India) gave the green signal to the initial public offering (IPO) of food delivery aggregator Swiggy, after which the papers related to the IPO were revealed on Thursday night. Three very important things have come to light in the draft red herring prospectus. Where Swiggy is lagging behind its rival and now listed company Zomato.

The first of the 3 reasons is - Operational Metrics:  Swiggy's food delivery business has moved towards a turnaround (profit from loss) after almost 10 years.

However, EBITDA (Earnings before interest, taxes, depreciation, and amortization) for FY 2024 is still negative. Whereas, Zomato's EBITDA is at Rs 1000 crore after adjustment. Swiggy's monthly user transactions and margin contribution are much lower than Zomato. Swiggy vs Zomato

Second-Growth in Quick Commerce (Benefit of Blinkit)- After the acquisition of Blinkit, Zomato's quick commerce business has grown very fast, so much so that many experts are giving it more importance than its main business.

Although Swiggy has the same number of dark stores as Zomato at the end of FY 2024, its gross orders are behind Blinkit and its contribution margin is also still negative.

For the first quarter of FY 2025, Zomato has continued to grow with a net profit of ₹ 253 crores. While Swiggy's net loss exceeded ₹ 600 crores. Third-Cash on the Books- While it comes to cash on the books, Zomato has much more cash than Swiggy at the end of the last financial year. Zomato had ₹ 12,241 crore in cash. In comparison, Swiggy had ₹5,446 crore in cash at the end of FY24. As for cash on books, Swiggy had ₹2,038.1 crore in cash at the end of the June quarter. While Zomato had ₹12,539 crore in cash on the balance sheet. After listing in 2021, Zomato shares fell to a low of ₹40 but have since risen more than 7 times from those levels. Swiggy is yet to decide its price band. Swiggy IPO: Use of funds