In an interaction with CNBC-TV18 on Tuesday, March 11, Irani explained what led him to exit his investment from Swiggy.
“We’re out of Swiggy. We didn’t like the way they reacted to the competition, which is Zepto in particular. Fighting discounts with discounts is not the right way to go,” Irani said.
The Helios MF CEO explained how Zomato was the differentiator in this with the way it reacted compared to Swiggy.
“I think Zomato did a fantastic job in the sense that they want to fight competition by way of strengthening their backbone, which is basically bring forward the capex. And that’s what you want to look for because you want to have your dark stores in place. You want to have your logistics in place. And that’s what we were looking for,” Irani said.
Despite exiting positions in Swiggy, Irani remains optimistic of the quick commerce space in general due to the model and hence remains invested in Swiggy’s rival Zomato.
“We are thoroughly convinced on the model. We’ve seen it working out perfectly in China. And frankly, we’re not different from the way the dynamics of the industry works in China. But I think the potential out here for Zomato to grow is really huge. So, we continue to be fairly invested in that stock,” Irani added.
Shares of Swiggy are trading well below their IPO price of ₹390, having seen a sharp fall from its post-listing highs.
18 analysts have coverage on Swiggy, of which 12 of them have a “buy” rating on the stock, while three each have a “hold” and “sell” rating.
On the other hand, shares of Zomato are also trading nearly 30% below its peak, but remain comfortably above their IPO price.