Swiggy’s shift to Indian control brings Instamart valuation into focus

To qualify as Indian-owned and controlled, a company must have foreign ownership below 50% and majority board representation by resident Indians. Swiggy now meets both criteria, allowing its quick commerce arm Instamart to operate an inventory-owned model alongside its existing marketplace for third-party sellers.

Jefferies India noted in a report dated 19 August that capping foreign holdings may trigger short-term outflows from foreign funds tracking MSCI and FTSE indices, though domestic investor interest could offset this if fundamentals improve.

Instamart’s losses narrowed in the June quarter (Q1FY27), with adjusted EBITDA loss falling 13% year-on-year and 9% sequentially to ₹778 crore. Net order value (NOV) rose 39% year-on-year and 3% sequentially to ₹5,817 crore during the same period.

Analysts suggest that as dark stores scale up and Instamart shifts to inventory ownership, profitability could improve. The model may allow capture of full product margins despite inventory losses, potentially boosting EBITDA margin as a percentage of NOV by 80–100 basis points over time, though current margins remain negative.

Emkay Global Financial Services values Swiggy’s food-delivery business at ₹57,000 crore using an EV/EBITDA multiple of 32x based on FY28 estimates. It assigns ₹6,500 crore to the out-of-home and supply chain business and notes ₹15,000 crore in cash holdings.

Based on Swiggy’s current market capitalization of ₹75,000 crore, subtracting the combined value of these three components implies a negative valuation of ₹3,500 crore for Instamart.

This implied negative valuation reflects market expectations of continued losses and potential need for further equity or debt funding. However, Swiggy’s new Indian-owned status may improve Instamart’s competitive position in the quick commerce space, where it would join Eternal and Reliance Retail as the third Indian-controlled player.

Amazon, Flipkart and Zepto remain foreign-controlled in this sector. Unless Swiggy’s food delivery business sees a sharp de-rating or Instamart’s financials deteriorate, there may be room for a reassessment of Instamart’s valuation as its operational model evolves.