Amazon Considers Investment In Swiggy's Instamart Ahead Of IPO: Report

Swiggy's recent filing with the Securities and Exchange Board of India (Sebi) for a Rs 10,414 crore (Initial Public Offer) IPO, indicated a potential deal of Amazon with its Instamart quick commerce division.

According to media reports, Amazon India is in contact with food aggregator Swiggy with interested in either picking up a stake in the ongoing pre-IPO placement or a buyout proposal for Instamart.

There is no official offer later placed yet, and quick action from Amazon’s headquarters is required for discussions to advance, sources highlighted. Early talks may not result in a transaction Due to the deal's complicated structure early negotiations may not result in translation.

Details also gave the clue that Swiggy is not interested in selling only its quick commerce business named Instamart and Amazon does not want to dive into the food market due to its slow growth.

The online food delivery segment in India showing high competition, to take age in this arena Swiggy is expected to set its price significantly lower than its main competitor, Zomato, which has a Rs 1.9 trillion market capitalisation.

Amazon's interest in acquiring Instamart, this move aligns with its goal to establish a quick commerce service in India. Currently, Amazon does not offer a quick commerce service in any market globally, so launching a separate vertical for quick deliveries in India would require approval from its global leadership.

According to a Goldman Sachs report from April, Zomato's quick commerce division, Blinkit, is estimated to be worth USD 13 billion. While there is no distinct valuation for Swiggy's quick commerce segment, Amazon's interest in Instamart highlights the growing importance of quick commerce in India's e-commerce landscape.

While there is no distinct valuation for the quick commerce segments of either Swiggy or Zomato, a Goldman Sachs report from April estimated Blinkit, Zomato’s quick commerce division, to be worth USD 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.