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Bengaluru-headquartered online food delivery and quick commerce company Swiggy has announced its intention to look at a stake sale in one of its investee companies, Rapido. In a letter to shareholders, Swiggy’s management noted that the food delivery business continues to attract new competition with new players and business models. However, there is still no clarity whether the divestment involves a complete stake sale by Swiggy or partial.
“Rapido, one of our investee companies, has announced their intention to enter the Food delivery space. Having scaled up from a bike-taxi player to a full-fledged mobility platform, Rapido is now the largest mobility player in India by rides and has been a disruptor in its space. As a shareholder, we are extremely happy with their success and value-creation; but do acknowledge a potential conflict of interest that may arise in the future. Our 12% minority stake has appreciated significantly since our investment (basis incoming interest) and we are actively re-evaluating our investment due to the above developments”, the shareholders letter stated.
In the past one year, Rapido, which is based out of Hyderabad, has shored up its war chest to enter the food delivery segment. According to Tracxn, in July 2024 Rapido raised $200 million in its Series E, also its largest fund raise round, from investors such as Westbridge Capital, Nexus Ventures Partners, Setu AIF, among others. According to news reports in FY24, the company has been able to increase its operational revenues by over 40% year-on-year, as well as stem losses of an equal quantum.
Additionally, Rapido has also attracted the attention of investment giant, Prosus, who also happens to be Swiggy’s single largest shareholder and holds 23.3% stake in the listed company. Prosus and Nexus venture Partners invested nearly $29.8 million into Rapido earlier this year taking the company’s estimated valuation now to around $1.1 billion, or around ₹9,300 crore, according to data from Tracxn.
Swiggy’s investment into Rapido was made nearly three years ago. According to the company’s annual report, in FY23, Swiggy acquired 15.10% stake on a fully diluted basis for ₹950 crore, putting the company’s valuation at around ₹6,333 crore back then.
However, with Rapido raising capital through fresh rounds in FY25, the shareholding of Swiggy stands revised to 12.02%. While the investment entails the appointment of a director on the board, Swiggy noted that it has “issued an irrevocable waiver letter basis which it has waived its right to appoint a director on an irrevocable and unconditional basis till 31 December 2025. Basis such waiver of rights, the Group concluded that it has no significant influence on Rapido”.
The current value of the stake according to the company is around ₹1049 crore.
This move also comes at a time when Swiggy’s losses have widened. In the first quarter of the fiscal, the food delivery business segment remained profitable, growing 10% sequentially from ₹1,628 crore in Q4 FY25 to ₹1799 crore in Q1 FY26. However, the company has been burning cash to grow its quick commerce segment. While in FY25, the company saw the segment posting losses of nearly ₹2187 crore, the quick commerce segment, Instamart, along with Swiggy Genie, Swiggy-Minis, Insanely Good, Swiggy Sports, Snacc and the supply chain and distribution segment posted a loss of ₹896 crore in Q1 of FY26. However, the adjusted EBITDA margin improved to -15.8% from -18.0% in Q4, according the company.
Sriharsha Majety, MD & Group CEO, Swiggy, in a statement said, “We have moved past the Mar-25 peak of losses in Quick-commerce, but amidst significant competition we will modulate investments to ensure that we drive the business towards scale-led profitability”.
Swiggy said it sits on cash and cash equivalents of ₹5,354 crore, as of 30 Jun 2025, and much of ₹319 crore spent in the quarter was spent in capex, funding of previous quarter’s dark store expansion, and the remainder was spent on other dark store additions to boost it quick commerce business.
“As we calibrate our network expansion and improve warehouse efficiency, capacity utilisation will improve over this fiscal year, driving down capex requirements incrementally. The QoQ increase in net working capital was primarily driven by an increase in trade receivables due to a higher sales mix of longer-credit-period categories, and advertising receivables in line with an increase in advertising revenue. We don’t expect any significant changes in the working capital cycles from here on. Overall, we remain comfortable with our strong balance-sheet", the shareholder letter further stated.
According to a report from Crisil, which dealt with the subject of IPO fund utilization of Swiggy, out of the ₹4499 crore raised through issue, the company has spent over half of the sum of ₹2619 crore, with no deviations from its purpose stated in the prospectus.
Talking about the latest Q1 of FY26 for Swiggy, analysts at Motilal Oswal Financial Services have noted that the increase in the order value of Instamart, as well as food delivery, were a positive. However, the report did also flag intense competition in the sector as a risk.
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