Amazon India Eyes Swiggy's Instamart Amid Swiggy's IPO Preparations: Report

Amazon’s interest in Swiggy Instamart aligns with its efforts to develop a quick commerce initiative in India

Swiggy is expected to price itself at a substantial discount to rival Zomato, which has a market cap of Rs 1.9 lakh crore.

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Amazon India has reportedly approached Swiggy for a potential deal involving its quick commerce business, Instamart, sources told the Economic Times. This move coincides with Swiggy's confidential filing of draft documents with SEBI for a Rs 10,414 crore ($1.25 billion) public offering, marking one of the largest IPOs for a new-age internet firm.

According to a source privy to the development told ET, "Amazon has shown interest in either acquiring a stake during the ongoing pre-IPO placement or proposing a buyout for Instamart. However, multiple roadblocks exist at the moment." The source further noted that no official offer has been made yet, and swift action from Amazon’s headquarters in Seattle is necessary for discussions to advance. Early talks may not result in a transaction due to the deal's complicated structure.

"Swiggy is unlikely to sell only its quick commerce business, and Amazon isn’t interested in the food delivery market where growth is slowing,” the source added. "Acquiring the entire company would be too costly, given Swiggy’s $10-12 billion valuation. Additionally, Amazon typically doesn’t take minority stakes."

ABP Live could not independently verify the report.

Swiggy is expected to price itself at a substantial discount to rival Zomato, which has a market cap of Rs 1.9 lakh crore. Separate valuations for Swiggy's and Zomato’s quick commerce verticals have not been provided, though a Goldman Sachs report in April valued Blinkit, Zomato’s quick commerce unit, at $13 billion.

Amazon's interest in Instamart aligns with its efforts to develop a quick commerce initiative in India. However, launching a separate vertical for quick deliveries will require global approval, as Amazon does not currently offer this service in any market worldwide.