Swiggy’s Rapido stake sale a temporary fix! JM shares views on Instamart slump sale
JM said Swiggy needs a much larger fund-raise, of over $500 million, to support its long-term ambitions in quick commerce. The Rapido stake sale value was below its estimate of Rs 2,900 crore.
- Sep 24, 2025,
- Updated Sep 24, 2025 10:23 AM IST
JM Financial on Wednesday retained ‘Reduce’ rating on Swiggy with target of Rs 440, calling Rapido stake sale a temporary fix and moves to restructure Instamart as steps to position it as an Indian-Owned-and-Controlled Company (IOCC).
Swiggy announced that it will divest its entire ownership in Rapido to MIH India Food Holdings BV (Prosus) and Setu AIF Trust (Westbridge) for a total consideration of Rs 2,400 crore (pre-tax). Prosus is a shareholder in Swiggy with 23.3 per cent holding as of June 2025.
In addition, Swiggy has also announced the slump sale of its Instamart business to Swiggy Instamart Private Ltd, an indirect wholly-owned subsidiary. The transfer of the Instamart business is likely to go through after Q3FY26.
Rapido stake sale JM Financial said Rapido stake sale value was below its estimate of Rs 2,900 crore. It said the stake sale alone may not be sufficient to address Swiggy’s balance sheet woes. It believes that at a time when the company is fast depleting its cash balance and there are growing competitive threats, it needs to take cues from its larger peer, which recapitalised itself last year despite no visible signs of balance sheet concerns.
"Despite Instamart delivering 100 per cent-plus YoY GOV growth in recent quarters, it has been losing relative share to Blinkit, as the latter expanded 130 per cent. With Blinkit’s guidance suggesting plans to double its store count over the medium term, we believe Instamart’s curbed expansion strategy runs the risk of meaningfully falling behind its more ambitious competition," JM said.
JM said Swiggy needs a much larger fund-raise, of over $500 million, to support its long-term ambitions in quick commerce.
Instamart slump sale JM said the change in organisation structure is likely being undertaken to smoothen the process of Instamart being treated as an Indian-Owned-and Controlled Company (IOCC). This will enable Instamart to shift its business model to inventory-led as and when Swiggy’s domestic shareholding exceeds 50 per cent, JM said.
Swiggy valuations
The domestic brokerage continued to value Swiggy’s food delivery business at 45 times EV/adjusted Ebitda multiple, Instamart business at 0.5 times EV/GOV multiple and out-of-home consumption basis 1 time EV/GOV multiple.
"Our September 2026 target price for Swiggy is unchanged at Rs 440 even after factoring in lower-than-expected proceeds from the Rapido stake sale. We maintain our REDUCE rating," JM said.
JM Financial on Wednesday retained ‘Reduce’ rating on Swiggy with target of Rs 440, calling Rapido stake sale a temporary fix and moves to restructure Instamart as steps to position it as an Indian-Owned-and-Controlled Company (IOCC).
Swiggy announced that it will divest its entire ownership in Rapido to MIH India Food Holdings BV (Prosus) and Setu AIF Trust (Westbridge) for a total consideration of Rs 2,400 crore (pre-tax). Prosus is a shareholder in Swiggy with 23.3 per cent holding as of June 2025.
In addition, Swiggy has also announced the slump sale of its Instamart business to Swiggy Instamart Private Ltd, an indirect wholly-owned subsidiary. The transfer of the Instamart business is likely to go through after Q3FY26.
Rapido stake sale JM Financial said Rapido stake sale value was below its estimate of Rs 2,900 crore. It said the stake sale alone may not be sufficient to address Swiggy’s balance sheet woes. It believes that at a time when the company is fast depleting its cash balance and there are growing competitive threats, it needs to take cues from its larger peer, which recapitalised itself last year despite no visible signs of balance sheet concerns.
"Despite Instamart delivering 100 per cent-plus YoY GOV growth in recent quarters, it has been losing relative share to Blinkit, as the latter expanded 130 per cent. With Blinkit’s guidance suggesting plans to double its store count over the medium term, we believe Instamart’s curbed expansion strategy runs the risk of meaningfully falling behind its more ambitious competition," JM said.
JM said Swiggy needs a much larger fund-raise, of over $500 million, to support its long-term ambitions in quick commerce.
Instamart slump sale JM said the change in organisation structure is likely being undertaken to smoothen the process of Instamart being treated as an Indian-Owned-and Controlled Company (IOCC). This will enable Instamart to shift its business model to inventory-led as and when Swiggy’s domestic shareholding exceeds 50 per cent, JM said.
Swiggy valuations
The domestic brokerage continued to value Swiggy’s food delivery business at 45 times EV/adjusted Ebitda multiple, Instamart business at 0.5 times EV/GOV multiple and out-of-home consumption basis 1 time EV/GOV multiple.
"Our September 2026 target price for Swiggy is unchanged at Rs 440 even after factoring in lower-than-expected proceeds from the Rapido stake sale. We maintain our REDUCE rating," JM said.