Swiggy made a significant mark on the stock market today with its highly anticipated initial public offering (IPO). The food delivery giant saw its shares open at a premium and close even higher, signaling robust investor confidence.
Opening Day Success
Swiggy’s shares started trading at ₹420 on the National Stock Exchange (NSE), a 7.69% increase from the IPO price of ₹390. On the Bombay Stock Exchange (BSE), the shares opened at ₹412, up by 5.64%. By the end of the trading day, Swiggy’s shares closed at ₹464 on the NSE, representing an 18.97% premium. Similarly, the shares closed at ₹455.95 on the BSE, marking a 16.9% premium
Investor Confidence Surges
The strong market debut exceeded expectations, especially given the initial lukewarm reception. The IPO was moderately subscribed at 3.59 times, with concerns about declining earnings growth affecting initial investor sentiment. However, the demand from institutional investors on the last day of bidding propelled the stock to a successful launch
Market Conditions and Predictions
Analysts had predicted a flat to negative listing, expecting the stock to open within a range of ±5-10% of the issue price due to low subscription interest from non-institutional investors (NIIs) and retail investors. The positive outcome surprised many, reflecting the potential and growth prospects investors see in Swiggy
Competitive Support
In an interesting show of camaraderie, Swiggy’s rival, Zomato, posted a congratulatory message on social media. Zomato’s post featured a picture of delivery agents from both companies standing together, captioned, “You and I…In this beautiful world,” signaling a supportive gesture amidst their competitive landscape
Financial Performance
Swiggy’s financials reveal significant growth and potential. For the quarter ending June 2024, Swiggy reported a net loss of ₹611.101 crore with revenue of ₹3,310.11 crore. For the financial year ending March 31, 2024, the company recorded a net loss of ₹2,350.24 crore and revenue of ₹11,634.35 crore. These figures underscore the heavy investment in growth and market expansion
Employee Wealth and ESOP Plans
Swiggy’s IPO also brought significant financial gains for its employees. The company’s Employee Stock Option Plans (ESOPs) have been instrumental in this wealth creation. With SEBI granting an exemption, employees can now sell their shares just one month post-IPO, instead of the usual one-year lock-in period. This move is expected to benefit nearly 500 employees, turning many into crorepatis
Future Prospects
Market experts see a promising future for Swiggy, particularly in the expanding food delivery market, projected to grow at a 20% CAGR. Swiggy’s diversified offerings, including Instamart for groceries and household items, and other services like Dineout, SteppinOut, Genie, and Swiggy Minis, position it well for continued growth and profitability
Conclusion
Swiggy’s IPO debut has been a resounding success, reflecting strong market confidence and investor interest. Despite initial skepticism, the stock’s performance on the first day has set a positive tone for its future on the bourses. As Swiggy continues to expand its services and market reach, its journey in the public markets will be closely watched by investors and competitors alike.
