Swiggy Shares End First Trading Session 17% Above Issue Price

Shares of foodtech major Swiggy closed their first trading session at INR 455.95, up 16.91% from the IPO price of INR 390, on the BSE.

Swiggy made its public debut today with the stock listing at INR 412, a 5.6% premium to the IPO price on the BSE. Similarly, it was listed at INR 420 on the NSE, a premium of 8% to the issue price. 

The stock surged 12.93% from the listing price to reach the intraday high of INR 465.30 on the BSE. 

As many as 11.29 Cr shares of Swiggy changed hands today. The company’s market capitalisation stood at INR 1.02 Lakh Cr ($12.09 Bn) at the end of the session. 

Meanwhile, its rival Zomato’s market capitalisation stood at INR 2.28 Lakh Cr ($27.07 Bn) at the end of the day. Showing a contradictory trading trend today, Zomato shares ended 0.9% lower at INR 258.55 on the BSE today. 

Brokerage firm JM Financial started coverage on Swiggy today, giving the first ‘buy’ recommendation for the foodtech major. It set a price target of INR 470, a 20% potential upside from its issue price of INR 390. 

The brokerage firm underlined that Swiggy’s food delivery duopoly structure should ensure steady growth and profits.

“While India’s online food delivery market is likely to grow at a healthy CAGR of ~20% in the foreseeable future, the odds of disruption by new competition appear miniscule today,” JM financial added.

The firm pointed out the immense growth potential in Instamart given QC is essentially a play on the broader retail market, which was sized at ~$ 1 Tn in CY22.

It is pertinent to note that Swiggy’s IPO was oversubscribed 3.59X on the final day of subscription. The offering received bids for 57.53 Cr shares as against 16.01 Cr shares on offer. 

Qualified institutional buyers portion attracted 6.02 times subscription, while the category for retail individual investors was subscribed 114% and that for non institutional investors 41%.

The initial share sale had a price range of INR 371 to INR 390 per share. The total size of the IPO was INR 11,324 Cr. The offer comprised a fresh issue of INR 4,999 Cr and an offer for sale (OFS) of 17.5 Cr shares. 

The IPO also resulted in about 500 employees of the company joining the ‘crorepati’ club.

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