Swiggy Announces Rs 1,000 Crore Strategic Investment in Logistics Arm to Fuel Growth
In a significant move to strengthen its delivery infrastructure, Swiggy Ltd. has announced a major capital injection of Rs 1,000 crore into its wholly-owned logistics subsidiary, Scootsy Logistics Private Limited. This strategic investment, approved by the company's board, aims to support the expansion of its delivery network and enhance operational capabilities.
Investment Structure and Purpose
The investment will be executed through a rights issue subscription, with the funds being deployed in multiple tranches. According to the company's regulatory filing, this substantial capital infusion is specifically earmarked for working capital requirements and capital expenditures to support Scootsy's ambitious growth plans.
Scootsy's Growth Trajectory
Scootsy Logistics, established in November 2014, has demonstrated remarkable growth in recent years. The company's financial performance shows a consistent upward trend:
- FY 2024: Achieved a turnover of Rs 5,795.7 crore, marking significant growth from previous years
- FY 2023: Recorded revenue of Rs 3,686.2 crore, showing substantial year-over-year growth
- FY 2022: Posted revenue of Rs 1,580.3 crore, establishing a strong foundation for future growth
Swiggy's Current Financial Position
While investing heavily in its logistics subsidiary, Swiggy's own financial metrics present a mixed picture. The company reported:
- Q4 2024 Revenue: Rs 3,993.07 crore, representing a 10.9% increase quarter-over-quarter
- Q4 2024 Loss: Rs 799 crore, compared to Rs 625.5 crore in the previous quarter
Market Performance and Analyst Outlook
Swiggy's stock performance has faced some headwinds since its November listing, with shares currently trading at Rs 360.55 on the National Stock Exchange, marking a 20.9% decline from its listing price. However, analyst sentiment remains predominantly positive:
- 12 analysts maintain a 'buy' rating
- 2 analysts suggest a 'hold' position
- 3 analysts recommend a 'sell' rating
The consensus among analysts suggests a potential upside of 47.7% over the next 12 months, indicating strong confidence in the company's long-term prospects despite current market challenges.
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