SoftBank’s Swiggy order leaves it richer by $500 million

SoftBank, the second-largest investor in Swiggy, has once again reaped a handsome return from its India bets. The investment, made through its Vision Fund, has already surged over two-fold in a span of three years after Swiggy’s shares soared 17% on debut.

In April 2021, the SoftBank Vision Fund acquired about an 8% stake in the company at a valuation of $5 billion. However, despite a broader sell-off, the stock of the food-delivery firm rallied 17% from the offer price of ₹390, valuing the company at $12.1 billion. That translates to a gain of nearly $500 million for SoftBank in three years. The rupee has depreciated almost 12% against the US dollar since April 2021.

SoftBank, which owns 173 million shares of Swiggy, continues to hold them as it opted out of diluting its stake through an offer for sale (OFS). Swiggy promises significant headroom for growth. “We think there’s a long way to go for Swiggy,” said Sumer Juneja, Managing Partner and Head of EMEA & India Investing at SoftBank, during an exclusive interaction with CNBC-TV18’s Shereen Bhan.

What’s more, the positive results in its Vision Fund investments also helped the Japanese technology group to swing to profit in the September quarter. Besides Swiggy, the company also holds stakes in Brainbees Solutions (FirstCry) and Ola Electric Mobility. While it owns 20% in FirstCry, its ownership in Ola Electric stood at 17.8% as of the end of September.

According to Juneja, going public during a turbulent market was challenging, but strategic pricing and investor confidence ensured success. He also signalled a potential stake sale in Ola Electric in a “thoughtful and gradual manner” once its investment passes the mandatory lock-in period of six months.

Additionally, Swiggy also became the sixth Indian firm to achieve the milestone of ₹1 lakh crore on debut. Earlier in October, the listing of Hyundai Motor India saw the company closing the day with a market capitalisation of ₹1.5 lakh crore. Similarly, other technology companies like Paytm, Nykaa, and Zomato all crossed the milestone in their 2021 listings.

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