Hindustan Composites picks up stake in IPO-bound Swiggy; stock surges 9%

Shares of Hindustan Composites rallied nearly 9% in intraday trade on Tuesday after the auto ancillary company signed a deal to pick up stake in IPO-bound online food delivery platform, Swiggy. The company plans to acquire 1.5 lakh shares, or 0.01% stake, in the foodtech unicorn in an all-cash deal worth ₹5.18 crore. The timeline for completion of the acquisition is November 30, 2024, as per the company.

“The equity shares acquired shall form part of the investment of the company with a view to gain long term / short term investment benefits,” Hindustan Composites said in an exchange filing on Monday.

Cheering the news, Hindustan Composites shares surged as much as 8.6% to ₹633 on the BSE. Early today, the microcap stock opened higher at ₹620 against the previous closing price of ₹582.65.

At the time of reporting, the stock was trading 4.18% higher at ₹607, with a market capitalisation of ₹896.5 crore. The stock has witnessed strong rally in the recent past, with the stock price touching a 52-week high of ₹669.90 on August 20, 2024, rebounding from a 52-week low of ₹370 on May 5, 2024. In the last one year, the counter gained 29%, while it surged 43% in six month and over 6% in a month. In the calendar year 2024, the stock has climbed 35%.

As per the regulatory filing, Swiggy, an Indian online food ordering and delivery company, reported a turnover of ₹4,653.30 crore in the financial year 2022-23, rising from ₹3,557.10 crore in FY22 and ₹2,008 crore in FY21.

Last week, Bollywood actor Amitabh Bachchan’s family office reportedly picked up a minority stake in Swiggy from its employees and early backers for an undisclosed amount. Besides, Raamdeo Agrawal of Motilal Oswal Financial Services also purchased stake in foodtech startup.

Food tech major Swiggy filed its initial public offering (IPO) in April this year after its shareholders' approved a proposal to raise $1.25 billion via listing of shares on stock exchanges. The Bengaluru-based firm, in its regulatory filing with the finance ministry's Registrar of Companies, said it passed a special resolution to raise ₹3,750 crore by way of a fresh issue of equity shares and up to ₹6,664 crore via an offer for sale (OFS) by existing shareholders.

The offer also includes a green shoe option, if required, and the board may also invite existing shareholders to take part in the offer. Further, the company may also raise about ₹750 crore via a pre-placement offer from anchor investors.

Founded in 2014, Swiggy operates in more than 600 Indian cities in collaboration with nearly 2 lakh restaurants. Swiggy Instamart, its quick commerce platform operating in 25+ cities, delivers groceries and other essentials across 20+ categories in 10 minutes. Recently, new-age companies such as Ola Electric, Awfis, and Firstcry listed their shares on the domestic bourses.

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