Food delivery giant plans major capital injection into its logistics arm to strengthen warehousing and distribution capabilities across Tamil Nadu
In a significant move that could reshape Tamil Nadu’s logistics landscape, food and grocery delivery powerhouse Swiggy Ltd has announced plans to invest up to ₹1,000 crore in its wholly-owned subsidiary, Scootsy Logistics Private Limited. The investment, approved by Swiggy’s Board of Directors on February 21, 2025, will be executed through a rights issue in one or more tranches.
The capital injection comes at a crucial time for Scootsy Logistics, which has shown remarkable growth over the past three years. The company’s turnover has witnessed a dramatic surge from ₹1,580 crore in FY22 to ₹5,796 crore in FY24, demonstrating the rapidly expanding scale of its operations in supply chain services and distribution.
This strategic investment aims to bolster Scootsy’s working capital and support capital expenditure for business expansion, particularly in warehouse management and order fulfillment capabilities. The move is expected to create significant ripple effects across Tamil Nadu’s startup ecosystem, especially in the logistics and supply chain sectors.
“This investment will be utilized for working capital and other capital expenditures as part of the company’s business expansion,” Swiggy stated in its filing with stock exchanges. The transaction, while falling under related party dealings, has been structured at arm’s length, maintaining transparency in corporate governance.
The timing of this investment is particularly noteworthy, coming shortly after Swiggy reported its Q3FY25 results. Despite posting a wider consolidated net loss of ₹799 crore compared to ₹574.4 crore in the previous year, the company has shown strong revenue growth, with consolidated revenue from operations increasing by 31% year-on-year to ₹3,993 crore.
Dr. Rajesh Kumar, Principal Analyst at Chennai-based LogiTech Research, comments on the development: “This investment signals Swiggy’s commitment to vertical integration and supply chain optimization. For Tamil Nadu’s startup ecosystem, this means increased opportunities for local logistics tech startups to collaborate and integrate with Scootsy’s expanding infrastructure.”
The investment is expected to generate significant employment opportunities in Tamil Nadu’s logistics sector, particularly in warehouse management and supply chain operations. Industry experts predict this could lead to the creation of over 1,000 direct and indirect jobs across the state.
Scootsy’s comprehensive service portfolio includes advanced warehouse management systems, in-warehouse processing with value-added services, and efficient order fulfillment solutions. The company has demonstrated impressive growth, with its turnover reaching ₹5,195.7 crore for the financial year ended March 31, 2024.
Looking ahead, Swiggy has expressed confidence in its growth trajectory, projecting positive adjusted EBITDA by the third quarter of FY26. This investment in Scootsy Logistics appears to be a strategic step toward achieving that goal while strengthening its position in the competitive food and grocery delivery market.
For Tamil Nadu’s startup ecosystem, this development represents more than just a corporate investment. It signals the state’s growing importance as a logistics hub and could potentially attract more investments in supply chain technology and infrastructure.
