TVS Motor Company and Its Strategic Move to Divest Stake in Rapido

TVS Motor Company has announced its decision to divest its stake in the bike-taxi aggregator Rapido, securing an amount of Rs 287.93 crore. The agreements have been signed with Accel India VIII (Mauritius) Limited and MIH Investments One BV, focusing on the monetisation of its investment in Roppen Transportation Services Private Limited, also known as Rapido, as noted in an exchange filing.

Details of the Divestment

In a strategic move, TVS Motor plans to sell its shareholding in Rapido, which consists of 11,997 Series D CCPS to Accel India VIII (Mauritius) for Rs 143.96 crore, alongside 10 Equity Shares and 11,988 Series D CCPS to MIH Investments One BV for Rs 143.97 crore, as outlined in the filing. This divestment marks a full exit by another significant investor from Rapido.

Recent Developments in the Market

Recently, food-tech giant Swiggy made its exit from the company, selling its approximate 12% stake for around Rs 2,399 crore, which yielded a 2.5x return on its investment made less than four years prior. Swiggy cited potential conflicts of interest regarding Rapido’s delivery and mobility goals as a reason for its departure.

Rapido’s Growing Influence in India’s Mobility Sector

Rapido is rapidly establishing itself as a formidable player in India’s mobility market. Notably, Uber’s CEO, Dara Khosrowshahi, commented that Rapido has emerged as a more significant competitor to Uber in India than Ola, underscoring its expanding impact in the two- and three-wheeler mobility space.

New Initiatives by Rapido

In August, Rapido initiated a pilot programme for its standalone food delivery application, Ownly, in select neighbourhoods such as Koramangala and HSR Layout in Bengaluru. Reports suggest that the firm is preparing for a broader launch aimed for completion by the end of November.