How will Rapido stake sale & Instamart revamp aid Swiggy? Nomura decodes

On Tuesday, after market hours, Swiggy's board approved a stake sale in the ride-hailing startup Rapido to Netherlands-based MIH Investments One BV

Swiggy’s board, on Tuesday after market hours, approved the sale of its stake in ride-hailing startup Rapido to Netherlands-based MIH Investments One BV, along with the sale and transfer of its quick commerce arm, Instamart, via a slump sale.

 

Global brokerage Nomura believes the Rapido stake sale will strengthen Swiggy’s cash balance, while the Instamart restructuring is expected to improve contribution margins of its quick commerce business. The brokerage maintained its ‘Buy’ rating on Swiggy with an unchanged target of ₹550 per share.

 

However, at 9:33 AM, Swiggy’s share price was trading 0.86 per cent lower at ₹445.3 per share. In comparison, BSE Sensex was down 0.39 per cent at 81,783.56.    FOLLOW LATEST STOCK MARKET UPDATES LIVE

 

Swiggy's stake sale in Rapido

The food delivery major will sell 10 equity shares and 163,990 Series D compulsorily convertible preference shares (CCPS) to MIH Investments for about ₹1,968 crore, and 35,958 Series D CCPS to WestBridge for ₹431 crore, according to an exchange filing. With the planned stake sale to MIH Investments and WestBridge, Swiggy is set to raise around ₹2,399 crore from its holdings in Rapido.

 

MIH Investments One BV, part of the Prosus group, which holds a 23.31 per cent stake in Swiggy through its affiliates, invested ₹250 crore in Rapido during its Series E funding round in February 2025, acquiring about a 2.9 per cent stake. Prosus already owned around 3-4 per cent in Rapido prior to this investment.

 

Analysts at Nomura believe the monetisation done by selling a stake in Rapido will raise the cash balance of Swiggy and give it enough financial resources to weather the current burn phase of its quick commerce (Instamart) business. 

Swiggy Instamart restructuring

Swiggy's board has also approved the sale and transfer of its quick commerce business, Instamart, through a slump sale.

 

“The board of directors at their meeting held today, September 23, 2025, subject to approval of the shareholders, considered and approved the sale and transfer of its quick commerce business under the brand name ‘Instamart’,” the filing read. 

 

This restructuring, according to Nomura, is a step in the direction of enabling Instamart to own inventory in its quick commerce business once Swiggy becomes an Indian Owned and Controlled Company (IOCC) when its domestic shareholding crosses 51 per cent. 

 

Switching to an inventory-led model can help improve the contribution margin of Swiggy’s Instamart business as Eternal expects a 100 basis points (bps) improvement from the same, according to brokerage analysis.  

Swiggy's valuation

Nomura believes that at the current levels, the market is valuing the company’s quick commerce business quite low, at about 0.3 times its total sales value (EV/GOV). This is much lower than a competitor, Eternal, which is valued at about 0.9 times its sales.

 

Nomura believes the stock can perform much better if the company executes its plans well and shows a clearer path to breaking even (becoming profitable) in its quick commerce business.