Amazon India approaches Swiggy for stake in Instamart: Report

Amazon India has reportedly approached IPO-bound Swiggy for a potential deal involving its quick commerce business, Instamart. The e-commerce giant is eyeing a stake in the ongoing pre-IPO placement or a buyout proposal for Instamart.

According to a report in The Economic Times, there are, however, multiple roadblocks at the moment. There is no official offer on the table yet, the report added. 

This comes at a time of Swiggy confidentially filing draft documents with SEBI for Rs 10,414 crore public offering. 

The report added that the early discussions might not translate into a transaction, considering the complicated structure of the deal. As per sources quoted by the financial daily, Swiggy would not be interested in selling only its quick commerce business and Amazon would not be interested in the food delivery business where growth is gradually starting to plateau. 

The daily quoted sources saying that buying the entire company would be too expensive at $10-12 billion, and Amazon does not usually pick up minority stakes. 

Amazon’s interest in Swiggy Instamart comes as the e-commerce giant is trying to work on its own quick commerce initiative for months. However, they will require global clearance for it and a separate vertical, considering it does not offer the service in any of its markets globally. 

Swiggy is looking to reduce the shareholding of one of its oldest backers, Prosus, that owns a 33 per cent stake and is in the process of paring its ownership to less than 26 per cent, ahead of the IPO, where it does not want to be qualified as a promoter.