Baron Capital marks down Swiggy's fair value by 34% to $50.9M

Baron Capital, under its Baron Emerging Markets Fund, holds close to 0.75% stake in Swiggy. The markdown comes just weeks after Invesco cut the food delivery firm's valuation.

Baron Capital marks down Swiggy's fair value by 34% to $50.9M

Tuesday May 16, 2023,

2 min Read

US-based asset management firm Baron Capital has slashed the valuation of its holding in Swiggy by 34% to $50.9 million, as per the filings with the US Securities and Exchange Commission (SEC) as on December 31, 2022.

The US fund invested in the food delivery firm in January 2022 as part of its $700 million funding round. It holds close to a 0.75% stake in the company through Baron Emerging Markets Fund.

The development marks the third such valuation cut in Swiggy by an investor. In May last year, Invesco cut the value of its holding to $5.5 billion, as per media reports. Last month, the US-based investment management firm cut the valuation of its holding in Swiggy to $8 billion from $10.7 billion, as per its regulatory filings.

The drop in valuation mirrors a cautious sentiment among investors who are re-evaluating the worth of their investments amid tough macroeconomic conditions. Volatility in rival Zomato's stock price has given rise to apprehensions about its business, notably in light of the economic downturn and its associated decline in consumer confidence.

How to do the Relative Valuation of Stocks? Basics of Stock Valuation
Also Read
Swiggy shuts down premium grocery service Handpicked

Recently, BlackRock—one of BYJU'S top investors—also pulled down the valuation of its holding in the edtech firm by half to nearly $11.5 billion.

Last week, YourStory reported that US fund Neuberger Berman slashed the valuation of its holding in healthtech firm Pharmeasy and fintech firm Pine Labs.

In FY22, Swiggy reported a widening loss, even as its revenue rose two-fold. The company recorded a loss of Rs 3,629 crore in FY22 versus a loss of Rs 1,617 crore last year. Expenses shot up to Rs 9,574 crore from Rs 4,139 crore last fiscal, led by an increase in the cost of product procurement and advertising expenses.

The company earned a revenue of Rs 5,705 crore in FY22, up from Rs 2,457 crore in FY21. Prosus—one of Swiggy's biggest investors, said last year that the gross merchandise value (GMV) of Swiggy's food delivery arm grew 40% in the January-July period this year.

Edited by Megha Reddy