Amazon eyes stake in Swiggy’s Instamart amid IPO plans: Report

Swiggy is expected to price itself at a substantial discount to rival Zomato, which has a market cap of Rs 1.9 lakh crore.

Amazon India has approached Swiggy for a potential deal involving its quick commerce business, Instamart, sources told the Economic Times. This development comes as Swiggy confidentially filed draft documents with SEBI for a Rs 10,414 crore ($1.25 billion) public offering, marking one of the largest IPOs for a new-age internet firm.

“Amazon has shown interest in either acquiring a stake during the ongoing pre-IPO placement or proposing a buyout for Instamart. However, multiple roadblocks exist at the moment,” a source told ET.

No official offer has been made yet, and swift action from Amazon’s headquarters in Seattle is needed for discussions to advance, sources indicated. Early talks may not result in a transaction due to the deal's complicated structure.

“Swiggy is unlikely to sell only its quick commerce business, and Amazon isn’t interested in the food delivery market where growth is slowing,” the source added. “Acquiring the entire company would be too costly, given Swiggy’s $10-12 billion valuation. Additionally, Amazon typically doesn’t take minority stakes.”

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Moneycontrol could not independently verify the report.

Swiggy is expected to price itself at a substantial discount to rival Zomato, which has a market cap of Rs 1.9 lakh crore. Separate valuations for Swiggy's and Zomato’s quick commerce verticals have not been provided, though a Goldman Sachs report in April valued Blinkit, Zomato’s quick commerce unit, at $13 billion.

Amazon’s interest in Instamart aligns with its efforts to develop a quick commerce initiative in India. However, launching a separate vertical for quick deliveries will require global approval, as Amazon does not currently offer this service in any market worldwide.