- Zepto's IPO valuation likely cut to $3 billion from an initial target of $5 billion.
- Shares of Swiggy were up 6% while Eternal was up 9.1% in the last two sessions following the news.
- At around 1 pm on July 28, Swiggy shares were up nearly 4% at Rs 268, while Eternal gained 3% to Rs 305.
- Swiggy had around Rs 10,800 crore in cash and short-term investments, while Eternal held roughly Rs 16,000 crore of cash and liquid investments.
- Investors say the valuation reset reflects a shift in public market sentiment towards rewarding sustainable growth and profitability.
Zepto's IPO valuation has been reduced from $5 billion to $3 billion, reflecting a significant shift in investor sentiment. Market participants suggest that this adjustment indicates a growing reluctance to finance the aggressive cash burn that has characterized Zepto's rapid expansion.12
In response to the news, Swiggy's shares rose by 6% while Eternal's shares increased by 9.1% over the last two trading sessions. As of July 28, Swiggy shares were trading at Rs 268, up nearly 4%, while Eternal shares reached Rs 305, gaining 3%.3456
Swiggy reported approximately Rs 10,800 crore in cash and short-term investments at the end of the June quarter, while Eternal held around Rs 16,000 crore in cash and liquid investments. This financial stability may have contributed to the positive market reaction to the news regarding Zepto's valuation.
Zepto had initially received Sebi's approval for its IPO in April, with market estimates valuing the company at around $7 billion. The recent valuation cut signals a potential shift in public market investors' willingness to support companies with high cash burn rates, as noted by industry analysts.
“Investors believe the valuation reset reflects a shift in public market sentiment towards rewarding sustainable growth and profitability. Meanwhile, Swiggy had around ₹10,800 crore in cash and short-term investments, while Eternal held roughly ₹16,000 crore of cash and liquid investments at the end of the June quarter.”
