Swiggy Ltd. has announced a significant investment of ₹1,000 crore in its wholly owned subsidiary, Scootsy Logistics Pvt. Ltd., to support its business expansion. The board of Swiggy approved this investment, which will be made in one or more tranches through a rights issue, according to an exchange filing on Friday.
Investment Details
The approved funds will be utilized for working capital and other capital expenditures as part of the company’s business expansion plan. The indicative time period for the investment was not provided by the company.
About Scootsy Logistics
Incorporated on November 27, 2014, Scootsy Logistics is involved in the supply chain service and distribution business. The company’s turnover for the financial year ended March 2024 stood at ₹5,795.7 crore, a significant increase compared to ₹3,686.2 crore in fiscal 2023 and ₹1,580.3 crore in fiscal 2022.
Swiggy’s Financial Performance
Meanwhile, Swiggy, the parent entity, reported a widened loss of ₹799 crore for the quarter ended December 31, 2024, compared to ₹625.5 crore in the preceding quarter. However, the company’s revenue increased by 10.9% sequentially to ₹3,993.07 crore.
Stock Performance and Analyst Ratings
Shares of Swiggy closed 3.49% lower at ₹360.55 apiece on the National Stock Exchange on Friday, compared to a 0.51% fall in the benchmark Nifty 50. The stock has declined by 20.9% since its listing in November. According to Bloomberg data, twelve out of seventeen analysts tracking the company have a ‘buy’ rating on the stock, two recommend ‘hold,’ and three suggest ‘sell.’ The average of 12-month analysts’ price targets implies a potential upside of 47.7%1.
Conclusion
This investment in Scootsy Logistics underscores Swiggy’s commitment to enhancing its supply chain and distribution capabilities, positioning itself for continued growth and expansion in the competitive market. As Swiggy continues to innovate and expand, stakeholders will be closely watching its financial performance and market position.
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