Swiggy Sells Rapido Stake for Rs 2,400 Crore
Swiggy has taken a significant step in the Indian market by selling its stake in bike taxi aggregator Rapido for an impressive Rs 2,400 crore. This move is designed not only to unlock value for Swiggy and its shareholders but also to strengthen its foothold in the rapidly evolving delivery sector.
In a recent regulatory filing, Swiggy announced that its board approved the sale of 10 equity shares and 163,990 Series D Compulsorily Convertible Preference Shares (CCPS) in Rapido to MIH Investments One BV, a firm based in the Netherlands. This transaction, valued at Rs 1,968 crore, marks a strategic decision reflecting Swiggy's commitment to enhancing shareholder value. Both the buyer and MIH India Food Holdings BV are part of the Prosus group, indicating common ownership.
Additionally, Swiggy disclosed a separate deal involving the sale of 35,958 Series D CCPS in Rapido to Setu AIF Trust for Rs 431.49 crore. Unlike the earlier transaction, this deal does not involve a related party, showcasing Swiggy's approach to maintaining transparency in its operations.
Rapido has emerged as a formidable competitor to established players like Ola and Uber, steadily capturing market share in the two-wheeler taxi segment in India. This stake sale is seen as a strategic move to further bolster Swiggy's position in the competitive landscape.
Alongside the stake sale, Swiggy is also undergoing an internal restructuring. The company’s board has approved the transfer of its Instamart business, including all its assets and liabilities, to a newly formed subsidiary called Swiggy Instamart Private Limited. This restructuring is contingent on shareholder approval and is aimed at sharpening the focus on the fast-growing quick-commerce vertical.
By housing Instamart under a separate entity, Swiggy expects to create a more efficient corporate structure. The company aims to enhance long-term growth, improve performance, and provide better flexibility in resource allocation to the Instamart business.
Through these strategic moves, Swiggy is taking a two-pronged approach: monetizing its investment in Rapido while simultaneously restructuring Instamart to drive future growth. These actions are intended to create greater value for stakeholders and strengthen Swiggy's competitive edge in India's fast-evolving delivery and quick-commerce markets.
