Swiggy Debuts On The Bourses; Trades Over 2% on NSE

Food aggregator platform Swiggy made a steady debut on the Indian benchmark indices today (Nov 13, Wednesday). The stock opened at ₹420 apiece, 7.69% higher than the issue price of 390, while on the BSE it was priced at ₹412, up 5.64% than the issue price.

While the allotment of Swiggy IPO was finished on November 11, the shares were credited to demat account holders on Tuesday, November 12.

On the last day of bidding i.e. November 8, the IPO was subscribed by 3.59 times thereby receiving strong support from qualified institutional buyers and retail investors.

What do investors say?

Ashutosh Sharma of Prosus Ventures said, “Today’s listing is a landmark achievement for Swiggy, and a milestone for Prosus in India. Prosus has invested more than $8 billion into some of India’s best known digital companies including Swiggy, Urban Company and Meesho, along with many promising early-stage startups. Swiggy’s IPO is the latest success story for ‘Digital India’.”

He added, “Since our initial investment, we have consistently backed Swiggy as the team pushed boundaries, expanded into new categories, and enabled behavioural shifts by delivering value and delight to millions of customers across India. We’re confident that Swiggy will build on the strong foundation and customer love they enjoy to deliver many more pioneering innovations in the food and deliveries ecosystem.”

What do analysts say?

Prashanth Tapse of Mehta Equities said, “We believe the majority of the investor especially NII's & retail stayed back on few reason like Negative cash flow business model followed by concern on high competition and ongoing negative market mood. Considering low subscription demand from NII’s & Retail investors followed by market sentiments, there is a very high possibility of flat to negative listing in the range of +or - 5-10% on its issue price.”

JM Financial gave a ‘Buy’ rating on the stock by setting a target price of ₹470.

Shivani Nyati, Head of Wealth at Swastika Investmart said, “While the IPO received a decent subscription of 3.59 times, the current grey market premium (GMP) of around ₹1 (0.26%) indicates a muted investor response. This subdued sentiment is likely influenced by the company's continued losses, despite steady revenue growth.

The IPO's valuation, while appearing reasonable based on certain metrics, presents a challenge due to negative earnings. Additionally, the current volatile market conditions may further impact the listing performance.

Given these factors, a cautious approach is recommended. Investors with a high-risk tolerance and a long-term perspective may consider the IPO.”

About the company

Founded in 2014, Swiggy is a food delivery platform headquartered in Bengaluru. It is also engaged in offering quick commerce as well as packaged delivery services.

How’s it performing?

As of now, Swiggy is trading in green at ₹445.30 apiece on the NSE and BSE.