Swiggy , the leading food delivery and quick commerce platform in India, has announced significant strategic moves that are set to reshape its business structure. Despite these major announcements, Swiggy's shares declined 1.78% to ₹441.20 during Wednesday trading.

Corporate Restructuring and Asset Sale

Swiggy's board has approved two major decisions:

1. Instamart Separation: The company will transfer its quick commerce business, Instamart, to Swiggy Instamart Private Limited, an indirect wholly-owned subsidiary. This will be executed through a slump sale, expected to be completed after Q3 FY26.

2. Rapido Stake Sale: Swiggy will divest its entire 12% stake in the bike-taxi startup Rapido for ₹2,399.50 crore. The sale will be made to:

   • MIH Investments: ₹1,968.00 crore
   • Westbridge: ₹431.50 crore

Market Response and Analyst Opinions

Despite opening higher at ₹458.20, Swiggy's stock faced heavy selling pressure throughout the trading session. Analyst opinions on the company's prospects remain mixed:

Financial Implications

• The Rapido sale is expected to boost Swiggy's net cash position to over $850 million.
• Instamart contributed 24.21% of Swiggy's standalone revenue.
• Concerns exist about potential external funding needs for Instamart.

Regulatory Approval

Both the Instamart separation and Rapido stake sale transactions require approval from the Competition Commission of India.

These strategic decisions reflect Swiggy's focus on streamlining its operations and potentially unlocking value in its various business segments. As these transactions progress, stakeholders will be keenly watching how Swiggy leverages these changes to enhance its market position and financial performance in the evolving digital commerce ecosystem.

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.