Swiggy, an online food delivery company, recently acquired a tech-led FMCG retail distribution company named LYNK Logistics Pvt Ltd. With this, Swiggy enters the food and grocery retail market. The acquisition deal was finalized in July 2023, and company officials didn’t disclose its financial details. As per the reports, LYNK will continue to operate as an independent business and will be led by its co-founder and CEO, Shekhar Bhende.
For Swiggy, this acquisition deal is crucial from the business growth perspective as it will help the company explore business opportunities in the fastest-growing food and retail market. Swiggy, which is currently an unlisted company, will further look to strengthen its financials by leveraging the network of LYNK. In this post, we will look closer at the possible effect of this acquisition of Swiggy share price in the future.
Details of Swiggy’s Recent Acquisition With LYNK
Swiggy entered into a definite agreement with LYNK Logistics Pvt Ltd in an acquisition deal. It is the third major investment made by the food-tech giant Swiggy to target India’s fastest-growing FMCG market. Swiggy, which is involved in the online food delivery business, takes this step to diversify its business.
In a press release, Swiggy confirmed that LYNK will continue to operate as an independent business and didn’t disclose further details of the transaction of this acquisition deal. LYNK was founded in 2015 by Shekhar Bhende and Abinav Raja. It is a logistics company that helps FMCG brands grow their retail presence via its 10,000 stores in the top 8 cities in India.
LYNK majorly leverages an integrated technology platform to power the retail distribution value chain across warehousing. In an acquisition detail, it is decided that LYNK will leverage Swiggy’s strength in technology and logistics to scale its existing platform.
How Will LYNK Help Swiggy In Business Expansion?
Since the acquisition deal of Swiggy and LYNK Logistics Pvt Ltd is done to leverage the company’s technology and retail network, it will benefit Swiggy to expand its food and grocery business. Swiggy, an unlisted company, is also looking to benefit from LYNK’s existing network and streamline the supply chain. Let’s see how this acquisition deal will benefit Swiggy in the future:
Access To Retail Stores
The major benefit Swiggy will get from the acquisition deal is access to the wide network of the LYNK. Currently, LYNK has 10,000 retail stores in 8 major cities in India. It will be easier for Swiggy to target the top cities and streamline its food grocery delivery business. In addition, Swiggy can also expand its delivery network by streamlining its value chain process and delivering orders on time.
Growth In Net Profit
Since Swiggy is preparing for an IPO, an acquisition deal with LYNK will help Swiggy improve its financials. Swiggy’s net profit was not as expected in the last few financial years. The company recorded high business expenses and cash burn, which also impacted Swiggy share price in the unlisted share market. With this deal, Swiggy will aim to improve its finances.
Improves On-Shelf Availability
LYNK is one of the fastest-growing retail FMCG distribution companies with positive financials. It may help Swiggy improve on-shelf availability of the demanding grocery and other items and keep the fill rates positive. However, LYNK will look to leverage Swiggy’s advanced technology to improve its distribution network.
Possible Impact Of Swiggy-LYNK Acquisition On Unlisted Shares
Swiggy plans to launch its IPO which may launch in the next year, can positively affect this acquisition deal. If we closely look at the company’s growth plans in the last few years, Swiggy has been on an acquisition spree and looking for companies that feed well into its business ecosystem.
Even after the acquisition news, Swiggy share price in India recorded a positive growth. Investors who are looking to buy Swiggy unlisted shares can expect growth in the long term. However, it is also crucial to keep in mind that both companies don’t share complete details about this deal.
Predicting the exact growth and Swiggy share price in NSE regarding investment is difficult. We advise you to keep track of the company’s financial performance and market conditions.
You can use Stockify, which is India’s trusted unlisted shares broking platform, to get the complete financial report and updated Swiggy share price. You can check the company’s recent performance in the unlisted share market and make an informed decision based on recent data and figures.
If you are a newbie retail investor, Stockify’s unlisted share brokers will guide you with every step and help you analyze the benefits and risks associated with Swiggy unlisted shares. Since Swiggy is on track for business growth ahead of its IPO, getting the right information can help you plan your investment and reap the ultimate benefits and high returns in the future.