Prosus Sees Significant IPO Upside in India...
26 Jun, 2025
The Dutch investment giant Prosus is ramping up its attention on India, considering the country a strategic market with a high potential for initial public offerings (IPOs) by its portfolio firms as they grow. Prosus has already distributed approximately $4 billion to shareholders through its management of $6.5 billion of assets in more than 30 Indian companies, Ashutosh Sharma, head of India investments at Prosus, said at the company's Capital Markets Day in London.
The India portfolio of Prosus includes various industries, including food delivery, e-commerce, payments and lifestyle experiences. It is said to be a portfolio that is loosely coupled, which means that companies can work independently and still enjoy the collective wisdom and infrastructure. The strategy has assisted Prosus in establishing a robust ecosystem that facilitates cross-selling and sharing of best practices, which enhances value creation.
Prosus owns some of the Indian companies that are soon to be prepared to be listed in the public markets and this is bound to result in short-term returns. Urban Company is a home services platform that submitted draft IPO documents in April and is likely to list towards the end of this year. Jewellery retailer BlueStone has got regulatory clearance and is about to list, which is a milestone in the Indian portfolio of the firm.
Over 8.6 billion dollars have already been invested by Prosus in India and some important names like Swiggy, Meesho, Byju, Captain Fresh and Urban Company are the backbone of its portfolio. In November 2024, Swiggy, a food delivery giant, had an IPO of a lifetime, with Prosus earning about half a billion on a $1.3 billion investment and still having a 25 percent stake valued at about $2.7 billion.
Swiggy CEO Harsha Majety pointed out how the quick commerce business has grown rapidly and now outgrown the traditional food delivery business. What started as a convenience solution, quick commerce has grown to offer 30,000-40,000 stock-keeping units (SKUs) across categories such as home goods and personal care, changing the everyday consumer behavior in the online retail market in India.
Swiggy food delivery business has already become profitable and is targeting 100 million users 15 times a month. Although there are new entrants like Rapido, which has recently begun piloting a food delivery service in Bengaluru, the market is still dominated by Swiggy and Zomato, with market shares of 46 percent and 54 percent, respectively. In the short term, analysts anticipate minimal interference with this duopoly.
The fintech division of Prosus, PayU India, has restructured its operations in a bid to regain profitability following losses incurred in the consumer loan book. The payments business achieved break-even in the second half of FY25 and revenue increased by 12 per cent to 498 million. The credit arm, PayU Finance, reported an increase in revenue to $171 million, which consolidated the revenue to $669 million in FY253.
The reorganization was done with special teams on key account management, customer acquisition and new partnerships to fast-track business growth and enhance margins.
In FY25, Prosus announced consolidated revenues of 6.2 billion, which were up 21 percent compared to 5.5 billion in FY24. The adjusted earnings before interest and tax (aEBIT) of the company became positive with an amount of 179 million in FY25, against the negative aEBIT of 118 million in the previous year. The Indian portfolio has been strong, with over half of the investments made by Prosus in India recording a healthy internal rate of return (IRR).
The fast commerce division of Swiggy, Instamart, has recorded a 101 percent year-on-year growth in gross order value (GOV) in Q1 FY25, with 316 new dark stores being added. This growth has, however, presented profitability challenges because of network expansion and stiff competition. Swiggy wants to achieve contribution breakeven in quick commerce within three to five quarters. In the meantime, the adjusted EBITDA loss of the company decreased by 2024 to 182 million dollars compared to 261 million dollars in 2023, indicating better operational efficiency.
The expanding presence of Prosus in India, including significant investments and a maturing portfolio, places the company in a position to benefit from future IPOs and liquidity events. As some of its most important portfolio companies, such as Urban Company and BlueStone, are planning to go public and as the existing players, such as Swiggy, are rapidly expanding, Prosus is betting that the dynamic digital economy of India will bring major shareholder value in the near future.
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