Swiggy , the food delivery giant, has made significant strategic moves to reshape its investment portfolio and business structure. The company's Board of Directors has approved two separate transactions to sell its holdings in Roppen Transportation Services Private Limited (Rapido) and plans to restructure its quick commerce business, Instamart.

Rapido Stake Sale

Swiggy has agreed to sell its stakes in Rapido, a bike taxi and auto-rickshaw aggregator, in two separate deals totaling approximately ₹2,400 crore. The transactions are as follows:

1. Sale to Westbridge Capital: Swiggy will sell 35,958 Series D Compulsorily Convertible Preference Shares (CCPS) to Setu AIF Trust (Westbridge) for ₹431.50 crore.

2. Sale to MIH Investments: The company will divest 10 equity shares and 163,990 Series D CCPS to MIH Investments One B.V., a Netherlands-based company, for ₹1,968 crore.

The sale to MIH Investments is considered a related party transaction, as MIH belongs to the Prosus group, which holds approximately 23.31% shareholding in Swiggy through MIH India Food Holdings BV. This transaction requires approval from the Competition Commission of India and Swiggy's shareholders.

Instamart Restructuring

In a separate move, Swiggy's Board has approved the sale and transfer of its quick commerce business, Instamart, to Swiggy Instamart Private Limited, an indirect step-down wholly-owned subsidiary of the company. This transfer will be executed through a slump sale, subject to shareholder approval.

Key details of the Instamart restructuring include:

• Revenue Contribution: Instamart contributed ₹21,295.84 million, representing 24.21% of Swiggy's standalone revenue.
• Net Worth: Instamart's net worth stood at ₹(2,976.66) million, accounting for (2.48)% of Swiggy's standalone net worth.
• Transaction Timeline: The completion of the slump sale is expected after the third quarter.

Strategic Implications

These moves are part of Swiggy's efforts to optimize its investment portfolio and streamline its business operations. The company stated that these strategic decisions would help realize investments for the benefit of the company and its shareholders.

The restructuring of Instamart aims to create a focused and efficient entity for the long-term development of the quick commerce business, allowing for enhanced flexibility in resource deployment.

As Swiggy continues to evolve its business model, these transactions reflect the company's commitment to strategic growth and value creation for its stakeholders in the competitive food delivery and quick commerce sectors.

Swiggy , India's leading food delivery and quick commerce platform, has announced a significant restructuring of its quick commerce segment. The company's board has approved the sale and transfer of its Instamart business to a wholly-owned subsidiary, Swiggy Instamart Private Limited.

Key Details of the Transfer

The transfer, which is subject to shareholder approval, involves the sale of Swiggy's quick commerce business operating under the brand name 'Instamart'. This includes all relevant assets, liabilities, permits, licenses, records, intellectual property, employees, and contracts associated with the Instamart undertaking.

Financial Implications

According to the company's disclosure:

• Instamart's revenue stood at INR 21,295.84 crore, representing 24.21% of Swiggy's standalone revenue.
• The net worth of the Instamart undertaking was negative INR 2,976.66 crore, accounting for -2.48% of Swiggy's standalone net worth.

Transaction Structure and Timeline

The transfer will be executed as a slump sale, with Swiggy receiving a lump sum cash consideration based on the book value of Instamart's assets and liabilities at the time of transfer. The effective date for the transfer is expected to be after the third quarter, subject to board determination.

Strategic Rationale

Swiggy stated that this restructuring aims to develop "a focused, efficient, and strategically aligned corporate entity for the long-term development and performance of the Instamart business." The move is expected to provide enhanced flexibility in resource deployment for the quick commerce segment.

Regulatory Compliance

The transaction is classified as a related party transaction, as the buyer, Swiggy Instamart Private Limited, is an indirect step-down wholly-owned subsidiary of Swiggy. The company has assured that the transfer will be conducted at arm's length, based on the book value of the Instamart undertaking.

Conclusion

This strategic move by Swiggy underscores the growing importance of the quick commerce sector in India's evolving e-commerce landscape. By creating a separate entity for Instamart, Swiggy appears to be positioning itself for more focused growth and potentially easier access to capital for its quick commerce operations.