Tencent’s Top Backer Reaps Billions from Swiggy Investment
Prosus NV, the largest shareholder of Chinese tech giant Tencent Holdings Ltd., has made a staggering profit of over $2 billion from its investment in Indian food delivery firm Swiggy. This significant gain highlights the value of Prosus’s portfolio beyond its stake in Tencent.
A Lucrative Investment
Prosus, along with its controlling shareholder Naspers Ltd., invested $1.3 billion in Swiggy, acquiring a 31% stake ahead of the company’s initial public offering (IPO) in India. The IPO valued Swiggy at up to $11.3 billion, with Prosus selling shares worth over $500 million and retaining a 25% stake.
Prosus’s Indian Ventures
“We expect to benefit from the upside of the business and the tailwinds of the fast-growing Indian market in future,” said Ervin Tu, President and Chief Investment Officer of Prosus. The company has invested in several Indian firms that could list on public markets, demonstrating its confidence in the country’s growth potential.
Swiggy’s Successful Debut
Swiggy shares surged 13% on its trading debut in Mumbai, giving the company a market value of approximately $11.7 billion. This successful IPO reinforces Prosus’s strategy of investing in high-growth companies.
Replicating Tencent’s Success
Prosus’s investment in Tencent in 2001, when it paid $34 million for a 50% stake, has been a blockbuster success. Today, the company owns about a quarter of Tencent, which has a market value of around $480 billion. Prosus is now seeking to replicate this success by investing in other high-growth companies globally.
Diversifying Investments
The company has made significant bets in e-commerce, which have been paying off recently. In addition to the Swiggy IPO share sale, Prosus sold its stake in China’s Trip.com for about $1.5 billion. Tu emphasized that the company has “re-doubled” its efforts to deploy capital in a “very productive way,” focusing on sectors such as online food, classifieds, payments, and fintech.
India’s E-commerce Boom
Ashutosh Sharma, Prosus’s India head, noted that Swiggy’s $1.3 billion offering to institutional investors was heavily oversubscribed, with “eight of the top ten fund managers worldwide” buying in. This demonstrates the strong appetite for Indian e-commerce companies and Prosus’s ability to tap into this growth potential.
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