SBI MF bets big on Swiggy with ₹300 Cr open-market stake

SBI Mutual Fund has quietly acquired an additional 1.18 crore equity shares in Swiggy, worth roughly ₹300 crore, through open-market transactions.

Inc42 reported the details, noting the transactions occurred without fanfare. That’s telling. Unlike venture rounds or secondary sales, open-market purchases by mutual funds are typically driven by conviction in near-term returns, not growth-stage hype. For Swiggy, the timing is interesting. The company has reportedly been working to improve its financials—adjusting its strategy and narrowing its focus—while competitors have made progress toward profitability. Swiggy’s own break-even timeline has been a subject of debate, but the conversation around its business model appears to be evolving.

The ₹300 crore figure is modest in isolation, but it stands out as a notable open-market purchase in the Indian foodtech sector in recent years. More importantly, it may not be an isolated move. SBI MF’s accumulation of Swiggy shares over time suggests a pattern seen with other startups ahead of potential public listings. The fund’s approach here mirrors how some domestic institutions have positioned themselves in similar cases, though outcomes have varied. Some of those bets paid off unevenly, with mixed results post-IPO. The difference this time may lie in Swiggy’s reported focus on its core operations, avoiding the broader expansion seen in other high-profile cases.

Still, questions remain. Swiggy’s valuation has faced scrutiny, with some investors reportedly factoring in execution challenges. The company’s unit economics have shown signs of improvement, though the path to sustained profitability depends on scaling certain verticals, which remain competitive. Then there’s the regulatory environment. Gig-worker wage rules are under discussion, and while Swiggy has made adjustments to delivery-partner payouts, the long-term impact on margins is uncertain. Mutual funds, unlike venture capitalists, tend to prioritize these details. Their willingness to buy now suggests they believe Swiggy can navigate these challenges—balancing growth with margin discipline.

What happens next will be revealing. If Swiggy moves toward an IPO in the coming years, as some have speculated, SBI MF’s stake could serve as an early indicator of public-market sentiment. A successful listing would mark a milestone for Indian foodtech, reinforcing the idea that profitability—not just scale—matters. A stumble, however, could fuel skepticism about gig-economy models, particularly in markets where consumer spending is cautious and competition is fierce. Either way, the ₹300 crore bet is less about the money and more about the message: Swiggy’s story is no longer just about growth, but about whether it can deliver returns.

Sources: inc42.com