Food and grocery delivery major Swiggy will sell its entire 12% stake in ride-hailing platform Rapido through two separate transactions with Westbridge Capital and the Netherlands-based Prosus, totalling Rs 2,399.49 crore, according to a regulatory filing on Tuesday.
Swiggy to divest shares to Prosus and Westbridge Capital
Both Prosus and Westbridge Capital are existing investors in the ride-hailing startup. Swiggy will divest 10 equity shares and 163,990 Series D compulsorily convertible preference shares (CCPS) to MIH Investments One BV, a Prosus group entity, for Rs 1,968 crore, according to the regulatory filings. Additionally, Swiggy will sell 35,958 Series D CCPS to WestBridge Capital-backed Setu AIF Trust for Rs 431.49 crore.
Approvals for the deal are awaited from the CCI and Swiggy’s shareholders
Swiggy had invested Rs 950 crore in the ride-hailing company in 2022. The divestment amounts to an over 2.5X realisation in just over three years. The transaction is subject to customary conditions, including approvals from the Competition Commission of India and Swiggy’s shareholders. The larger part of the deal with Prosus is also subject to approvals under related-party regulations. As per latest available data, Prosus held approximately 23.31% stake in Swiggy, and around 2.7% in Rapido. Meanwhile, WestBridge is the largest stakeholder in Rapido with a 19% stake.
The proceed of Rs 2,399.49 crore will help Swiggy increase its cash balance. As of the first quarter of the current financial year, Swiggy held cash and equivalents of Rs 5,354 crore. Swiggy had earlier said it would offload its stake in Rapido over a potential conflict of interest as Rapido enters food delivery. Swiggy’s stake sale comes at a time when the company is bracing for a quick-commerce battle with Eternal’s Blinkit, Zepto, and Rapido during the upcoming festive season.