Shares of online food delivery platform Swiggy will be in focus on Wednesday after its Board of Directors approved three major transactions on September 23. These include the divestment of its stake in bike taxi aggregator Rapido through two separate deals worth a combined Rs 2,399 crore, and the slump sale of its quick commerce business, Instamart, to its wholly owned subsidiary.
The board approved the sale of 1,99,948 Series D Compulsorily Convertible Preference Shares (CCPS) and 10 equity shares in Rapido to two different buyers — MIH Investments One B.V. and Setu AIF Trust (Westbridge) — for Rs 1,968 crore and Rs 431.49 crore, respectively.
In a separate development, Swiggy also announced the proposed transfer of its Instamart undertaking, including all associated assets, liabilities, employees, contracts, and intellectual property, to Swiggy Instamart, a wholly owned step-down subsidiary. The transactions are subject to various regulatory and shareholder approvals and reflect Swiggy’s broader capital restructuring and investment realisation strategies.
Here are the details:
Swiggy to sell Rs 1,968 cr worth of Rapido stake to Dutch firm
Swiggy has approved the divestment of 10 equity shares and 1,63,990 Series D CCPS in Roppen Transportation Services Private Limited (Rapido) to MIH Investments One B.V., a Netherlands-incorporated company. The share purchase agreement (SPA) has been executed for a total consideration of Rs 1,968 crore, subject to the pricing norms under the Foreign Exchange Management (Non-Debt Instrument) Rules, 2019.
This deal includes customary warranties, indemnities, and closing conditions. It also requires approval from the Competition Commission of India and Swiggy’s shareholders under Section 188 of the Companies Act, 2013, as well as Regulation 23 of SEBI Listing Regulations. The company has clarified that it does not hold any shareholding in the purchaser entity. This strategic transaction is aimed at unlocking value for Swiggy’s shareholders.
Rs 431 cr Rapido CCPS to be sold to Westbridge
In a parallel transaction, Swiggy will divest 35,958 Series D CCPS held in Rapido to Setu AIF Trust and/or its affiliates (Westbridge) for a total consideration of Rs 431.49 crore. The board termed this a strategic decision aligned with the company’s intent to realise its investments. The agreement includes standard representations, warranties, and indemnity obligations typical of such transactions.
The transaction does not involve any promoter or related party considerations, and Swiggy has disclosed that it holds no shareholding in Westbridge. This off-market sale is also subject to applicable pricing and regulatory requirements as outlined under FEMA guidelines.
Instamart business to be transferred via slump sale
Swiggy has also approved the slump sale of its Instamart business to its wholly owned step-down subsidiary, Swiggy Instamart Private Limited. The transfer includes all relevant assets, liabilities, employees, licenses, permits, and intellectual property associated with Instamart. As of FY 2024–25, the business contributed Rs 2,129.58 crore (24.21%) to Swiggy’s standalone revenue and Rs 297.66 crore (2.48%) to its standalone net worth.
The transaction will be executed via a Business Transfer Agreement (BTA) and is expected to be completed after the third quarter of FY 2025–26, subject to shareholder consent and other customary closing conditions. While this is classified as a related party transaction due to the subsidiary relationship, Swiggy has confirmed it will be carried out on an arm’s length basis, with consideration determined based on book value at the time of transfer.
Source: Economic Times