Hindustan Composites Buy Minor Stake in Swiggy, Shares Gain

Hindustan Composite, an auto ancillary manufacturer, has bought a minority position in Swiggy, an online food delivery company that is set to go public. The development comes only days after Amitabh Bachchan’s family office acquired a minority share in the Bengaluru-based company.

“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 Rs 5.175 crore,” according to the business’s exchange filing.

According to a report issued through the National Stock Exchange (NSE), the board of Hindustan Composite has struck a deal with Swiggy to acquire 1,50,000 equity shares, for a total investment of Rs 5.17 crore.

Related: Foodtech Giant Swiggy Aims For $15 Billion Valuation in IPO

Hindustan Composites shares rose 8.6 percent to an intraday high of Rs 633 a share on the BSE. The shares jumped after the auto dealer announced a share purchase agreement with food delivery firm Swiggy.

As of 1:18 PM on 3^rd September, Hindustan Composites shares were up 4.78 percent, or Rs 27.85, to Rs 610.5. At the time, the company’s market capitalisation was approximately Rs 901.65 crore.

Swiggy’s net value was Rs 9,810 crore ($1.18 billion) in March 2023, according to the filing. Hindustan Composite intends to complete this modest acquisition by November 30, 2024, with the goal of achieving both short- and long-term benefits.

Swiggy apparently filed for an IPO in May using a confidential route. In its first public offering, the company plans to collect up to Rs 3,750 crore ($450 million) through a fresh issue of equity shares and an offer to sell up to Rs 6,664 crore ($800 million) in total. According to media sources, the company would soon file draft IPO documents with SEBI.

Swiggy also launched its sixth ESOP liquidity programme worth $65 million in July, leading up to the IPO. It claims to have enabled approximately Rs 1,000 crore of ESOP liquidity across five events, benefiting 3,200 employees.

Last month, the Prosus-backed startup expanded its leadership team by appointing a new chief executive officer (CEO) and chief operating officer.

Swiggy’s revenue for the first three quarters of FY24 was Rs 5,476 crore, with a loss of Rs 1,600 crore. It is yet to submit audited results for FY24.

Swiggy’s rival Zomato is presently valued at $28.3 billion, according to stock exchange data. The Deepinder Goyal-led company generated Rs 4,206 crore in revenue and Rs 253 crore in earnings in the first quarter of FY24.