Mumbai: Swiggy Limited has made a strong debut on the stock exchanges today, November 13, 2024, opening at ₹420 per share on the National Stock Exchange (NSE), which represents a 7.69% premium over its IPO issue price of ₹390. On the Bombay Stock Exchange (BSE), the shares opened at ₹412, reflecting a 5.64% increase.
IPO Overview
The Swiggy IPO was highly anticipated and officially listed today at 10:00 AM IST. The offering was well-received by institutional investors, leading to a total subscription rate of 3.59 times by the last day of bidding, which concluded on November 8, 2024.
Key Subscription Details
- Qualified Institutional Buyers (QIBs): 6.02 times
- Retail Individual Investors (RIIs): 1.14 times
- Non-Institutional Investors (NIIs): 41% of total subscriptions
Grey Market Premium (GMP)
Prior to its listing, Swiggy’s grey market premium had shown significant fluctuations. As of November 12, the GMP was reported at approximately ₹1, indicating a muted expectation for the stock’s performance on debut. This was a sharp drop from earlier predictions where the GMP was around ₹22 before the bidding opened.
Market Sentiment and Analyst Insights
Despite initial concerns regarding low subscription interest from non-institutional and retail investors, Swiggy’s listing has been met with optimism. Analysts had predicted a flat to negative listing due to prevailing market sentiments and competition in the food delivery sector.
- Akriti Mehrotra, Research Analyst at StoxBox, recommends holding Swiggy shares for medium to long-term growth potential, citing the company’s focus on expanding its Instamart service.
- Conversely, brokerage firm Macquarie has assigned an ‘Underperform’ rating with a target price of ₹325, highlighting concerns over profitability and competition.
Should You Buy Swiggy Shares?
Investors are contemplating whether to buy Swiggy shares following its positive debut. Here are some considerations:
Reasons to Buy
- Market Leadership: Swiggy is one of the leading players in India’s food delivery market, with a substantial market share.
- Growth Potential: The company is expanding its services beyond food delivery into groceries and household items through Instamart.
- Strong Institutional Backing: The IPO saw robust participation from institutional investors, indicating confidence in the company’s future prospects.
Reasons for Caution
- Profitability Concerns: Despite strong revenue growth, Swiggy has faced challenges with profitability and cash flow.
- High Competition: The food delivery market is highly competitive, with significant players like Zomato and new entrants posing challenges.
- Market Volatility: Broader market conditions and investor sentiment could impact stock performance in the short term.
Conclusion
As Swiggy begins trading today, investors will be keenly observing its performance amidst broader market trends and competitive dynamics. While the initial listing reflects strong institutional backing, ongoing challenges in profitability and market competition remain key considerations for potential investors.
Disclaimer: The information provided in this article is for informational purposes only and does not constitute financial advice. Investors should conduct their own research or consult with certified financial advisors before making any investment decisions.
