Business

Swiggy invests ₹1,600cr in Scootsy for expansion and operations

Published on December 3, 2024

Scootsy: Swiggy said the subsidiary will get Rs 1,350 crore for expansion-related costs in the brand Instamart, while Rs 250 crore will be fed as working capital.

Scootsy, a supply chain and distribution subsidiary of Swiggy, is set to receive additional funding of up to ₹1,600 crore through a rights issue, as announced in Swiggy’s quarterly results on December 3.

Allocation of Funds

Expansion of Instamart: ₹1,350 crore will be allocated towards growth-related expenses under the Instamart brand. This includes the expansion of Scootsy’s dark store network and payments for leases or licenses tied to these facilities.
Working Capital: ₹250 crore will be used as working capital to support ongoing operations.

This funding aligns with Swiggy’s IPO prospectus, where it outlined plans to scale operations and boost its infrastructure.

Details of the Rights Issue

Swiggy will subscribe to Scootsy’s rights issue at ₹7,640 per share. The company clarified that this investment will not alter the existing shareholding pattern.

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Scootsy’s Role in Swiggy’s Ecosystem

Scootsy operates in the supply chain sector, offering services like warehouse management, in-warehouse processing, order fulfillment, and shipping for wholesalers and retailers. Its role is critical to Swiggy’s operations, with the supply chain and distribution segment contributing nearly 40% of Swiggy’s overall revenue, second only to its food delivery business.

Financial Performance

Revenue Growth: Scootsy has shown consistent growth over the past three years, with revenue increasing from ₹1,580.3 crore in FY22 to ₹5,795.7 crore in FY24.
Losses: Despite its growth, Scootsy incurred a loss of ₹423.97 crore in FY24, reflecting the challenges of scaling its operations.

This investment underscores Swiggy’s commitment to strengthening its supply chain capabilities while positioning Scootsy as a key player in its operational strategy.