India’s food delivery sector witnessed a notable investor shift in July 2025, with mutual funds moving around ₹3,100 crore between Zomato’s parent company, Eternal, and its rival Swiggy. While Zomato’s stock gained nearly 17% during the month, institutional investors offloaded shares worth about ₹1,700 crore, booking profits after a strong rally. In contrast, they poured ₹1,400 crore into Swiggy, despite its stock having dropped over 26% year-to-date.

The exit from Zomato involved the sale of nearly 5.4 crore shares, signaling a cautious approach after its sharp rise. For many funds, the move was less about abandoning confidence and more about capitalizing on recent gains. Swiggy, on the other hand, has been struggling on the market but is increasingly seen as holding stronger long-term growth potential.

A large part of this optimism comes from Swiggy’s aggressive expansion in quick-commerce and grocery delivery, even though the company continues to face losses. Its growing fulfillment infrastructure and diversification beyond restaurant deliveries could be positioning it for resilience in an evolving market. By comparison, Zomato’s stock surge, likely driven by efficiency gains or product additions, made it a candidate for profit booking rather than fresh investment.

This reallocation reflects the dual lens through which institutional investors evaluate the sector—rewarding short-term momentum on one hand and betting on future upside on the other. Swiggy appears to be drawing confidence as the platform tries to establish dominance across adjacent segments, while Zomato faces pressure to demonstrate sustainable value beyond stock appreciation.

The ₹3,100 crore reshuffle highlights how investor sentiment is shaping competition. By redirecting capital toward Swiggy, funds are signaling a longer-term bet on its strategic trajectory, even as Zomato continues to deliver near-term gains.