Synopsis:
Swiggy has exited its entire 12% stake in Rapido for Rs. 2,399 crore, citing conflict of interest and focusing resources on strengthening its Instamart quick-commerce vertical.
The company, known for its strong presence in food delivery and quick commerce, has taken key strategic decisions that signal a shift in focus. Its board has approved transferring operations under its quick commerce arm while also divesting its entire stake in a mobility startup. This article explores the reasoning behind these moves.
Swiggy Limited’s stock, with a market capitalisation of Rs. 1,09,857 crores, fell to Rs. 437.15, hitting a low of up to 2.68 percent from its previous closing price of Rs. 449.20. Furthermore, the stock from start of the year has given a negative return of 19 percent.
Company announcement
Swiggy’s Board of Directors decided on September 23, 2025, to sell 10 shares and 1,63,990 Series D preference shares they owned in Rapido to MIH Investments One B.V., a company from the Netherlands. This deal is worth about Rs. 1,968 crore.
Another sale approved by Swiggy’s board is Rs. 431.5 crore to Setu AIF Trust (managed by WestBridge Capital). This pegs Rapido’s valuation at around $2.37 billion, more than double its 2024 funding round valuation of $1.1 billion. The sale will happen after getting approval from government bodies and Swiggy’s shareholders as required by law.
Also read: 1:1 Bonus Shares: Stock in focus after company revises record date for bonus issue
Why are the selling stake?
Swiggy, the Indian food delivery and quick commerce giant, has divested its entire approximately 12% stake in bike-taxi startup Rapido for a total consideration of Rs. 2,399 crore ($270 million). The stake was acquired in 2022 for around Rs. 1,020 crore ($120 million) as part of a $180 million funding round, aimed at creating synergies between Rapido’s bike captains and Swiggy’s delivery fleet.
Swiggy decided to sell its shares in Rapido because Rapido recently started its own food delivery service called “Ownly,” which competes directly with Swiggy. Rapido charges restaurants a much lower fee compared to Swiggy, making it a big competitor especially in smaller cities. Swiggy realized this could cause a conflict of interest since both companies are now competing in the same business. To avoid confusion and conflicts, Swiggy chose to sell its stake in Rapido and focus on its core food delivery business.
Swiggy is also facing financial challenges, mainly due to its quick delivery service Instamart, which is spending a lot of money to compete with rivals like Zomato’s Blinkit and Zepto. Though its revenue grew by 54% in the recent quarter, the company’s losses also increased significantly. By selling its Rapido shares, Swiggy will get Rs. 2,399 crore in cash, increasing its reserves and helping it manage its expenses better without needing to borrow money or sell more shares right away. This gives Swiggy more time to grow Instamart in a financially safer way.
In another step to improve finances, Swiggy is set to transfer its Instamart business to a separate subsidiary to make it more efficient and profitable. The sale of Rapido shares fits into Swiggy’s larger plan to focus on profitable core activities and sell off investments that don’t align with its main goals. Investors reacted to these changes with some profit-taking, causing a slight drop in Swiggy’s stock price, although the stock had risen well earlier in the year.
Q1 Financial Highlight
The company reported revenue of Rs. 4,961 crore in Q1FY26, a strong 54% YoY growth from Rs. 3,222 crore in Q1FY25 and an 12% QoQ increase from Rs. 4,410 crore in Q4FY25. Over the past three years, sales have grown at a healthy CAGR of 39%, reflecting consistent business expansion.
On the profitability front, the company posted a net loss of Rs. 1,197 crore in Q1FY26, higher than the Rs. 611 crore loss in Q1FY25 and lower than the Rs. 1,081 crore loss in Q4FY25, indicating both YoY and QoQ deterioration.
Written By Fazal Ul Vahab C H
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