After Big B, Hindustan Composites Picks Up Stake In IPO-Bound Swiggy

Listed auto ancillary company Hindustan Composites on Monday (September 2) said it has signed a share purchase agreement to acquire a stake in IPO-bound foodtech major Swiggy for INR 5.175 Cr. 

In a filing with the BSE, the listed company said that it will acquire 1.5 Lakh shares of the startup in an all-cash deal, translating to a 0.01% stake. 

“… We wish to inform you that the company has entered into a share purchase agreement to acquire 1,50,000 equity shares of Re. 1/- each of Swiggy Limited by making an investment of INR 5.175 Cr,” read the filings with the BSE. 

The company expects the transaction to be completed by November, 2024. “The equity shares acquired shall form part of the investment of the Company with (a) view to gain long term/ short term investment benefits,” Hindustan Composites added.

The filing said that the foodtech major’s net worth stood at INR 9,810 Cr at the end of March 2023 fiscal. 

The development comes nearly a week after actor Amitabh Bachchan’s family office reportedly picked up a minority stake in the foodtech major from its employees and early backers for an undisclosed amount. At the time, it was also reported that stock broking platform Motilal Oswal Financial Services’ chairman Raamdeo Agrawal had also bought a stake in Swiggy.

The development comes ahead of Swiggy’s public listing. The foodtech major filed its draft red herring prospectus via the confidential route with market regulator Securities and Exchange Board of India (SEBI) for a public listing earlier this year.

As per recent reports, Swiggy, which was last pegged at $10.7 Bn, was eyeing a valuation of $15 Bn valuation for its $1 Bn to $1.2 Bn initial public offering (IPO). The startup plans to use the proceeds from the IPO to bolster its footprint in the quick commerce space by expanding its dark store network.

Last week, 360 One, an investor in Swiggy, pegged the company at a valuation of $11.5 Bn. 

Founded in 2014 by Sriharsha Majety, Nandan Reddy, Phani Kishan Addepalli, Rahul Jaimini, Swiggy started off as a food delivery startup but later forayed into the quick commerce segment with Instamart. It also offers services such as Swiggy Genie and Minis stores. 

Even as it gears up for a public listing, the foodtech major continues to be a loss-making entity. The decacorn reported a net loss of INR 4,179.3 Cr in the financial year 2022-23 (FY23), up 15% from INR 3,628.9 Cr in the previous financial year. Operating revenue jumped more than 40% to INR 8,264.4 Cr in the fiscal year ended March 2023 from INR 5,704.9 Cr in FY22.