Swiggy Sells Rapido Stake in 2400 Cr. Deal

1. Core Transaction Details

• Business Parties Involved Swiggy (seller), Rapido (investment), Prosus NV and WestBridge Capital (buyers).
• Deal Structure: Swiggy has exited all its 11.8 percent stake in bike-taxi aggregator Rapido.
• Value of the whole deal: 2,400 crore (or around 288 million).
• Buyer Breakdown:
  • Prosus NV: Purchased shares at 1,968 crore.
  • WestBridge Capital: Purchased shares worth 431.5 crore.
• Approvals in Pending: The deal is liable to Competition Commission of India (CCI) approval as well as shareholder approval of Swiggy.

2. Strategic & financial Rationale Swiggy.

• High ROI: Swiggy first invested in Rapido in 2022, where its stake was roughly 1020 crore. Its sale of 2400 crore is a high unrealized gain of more than three times of its investment in about three years.
• Capital Consolidation: The divestment gives Swiggy a significant cash inflow. This capital can be strategically used to:
• Enhance its central food delivery and instant commerce business.
• Enhance its financial performance and dependency on outside financing.
• Faster possible to achieve profitability.
• Strategy: The shift is an indication of strategic alignment of the company towards its core business when it is faced with stiff competition.

3. Setting: Financial Performance of Swiggy.

• The sale of the stake is at a time of increasing losses on Swiggy even though the revenue is growing.
• Q1 FY26 Financials:
• Net Loss: 1,197 crore (twice as it used to be the year before).
• Revenue: 4961 crore (an impressive 54 percent growth per year).
• This deal may be regarded as a step towards cleaning up its balance sheet and assure investors that it is on its way to financial sustainability.

4. Consequences to the Wider Ecosystem.

• In the case of Rapido: The transaction represents a huge confidence of key international investors (Prosus) and one of the leading domestic PE firms (WestBridge) in its business model and growth path.
• In the case of Prosus: This investment will increase the exposure of proSus to the Indian mobility and transportation industry, joining the already existing portfolio that holds a considerable amount of stake in Swiggy itself.
• Market Signal: This underscores the dynamism of investments in startups whereby, to the extent that large investors actively buy and sell their strategic positions so as to match their changing portfolios and areas of focus.