- As per a report, Amazon India shows interest in quick commerce business amid Swiggy's IPO preparations.
- No official offer was made; multiple roadblocks including Amazon's aversion to minority stakes and Swiggy's reluctance to sell only Instamart.
The Economic Times has recently reported that Amazon India has approached Swiggy, an Indian online food ordering and delivery platform, regarding a possible deal for Instamart, its quick commerce business, according to three informed sources.
The same report also indicates that this follows Swiggy submitting a confidential draft document to Sebi for a public offering worth Rs 10,414 crore.
“Amazon has swooped in with interest to either pick up a stake in the ongoing pre-IPO placement or a buyout proposal for Instamart… but there are multiple roadblocks at the moment,” said one of the persons familiar with the situation.
No official offer has been made yet, however, sources say Amazon’s headquarters in Seattle need to act quickly for discussions to progress. Early talks might not lead to a deal because of the deal's complexity.
Additionally, sources state that Swiggy probably won’t sell just its quick commerce division, and Amazon isn’t keen on the food delivery sector, which is seeing slower growth. And buying the whole company would be too expensive, given Swiggy’s valuation of $10-12 billion. But then Amazon generally avoids taking minority stakes.
In April, Swiggy bagged approval for an initial public offering (IPO) of approximately INR 10,414 crore ($1.25 billion) during an extraordinary general meeting of its shareholders. The plan for the company was to raise INR 3,750 crore ($450 million) in new funds, and the IPO would also involve a sale of existing shares worth up to INR 6,664 crore ($800 million).
Edited by Harshajit Sarmah
