Swiggy Shares Tumble Over 5% In Second Trading Session

SUMMARY

Amid a decline in its share prices, Swiggy’s market capitalisation dropped to INR 98,536.45 Cr (about $11.67 Bn)

After months of anticipation, Swiggy made its stock market debut on November 13, with its shares listing at a 8% premium on the NSE

Swiggy’s public listing comes amid rising competition in the quick commerce space and a boom in sales in the segment

After a stellar stock market debut, shares of Swiggy nosedived 5.6% in early trading hours to INR 430.30 apiece on the BSE today (November 14) as sell off in the broader Indian markets continued.

The stock rallied over 7% in the second trading session to hit an intraday high of INR 489.25 on the BSE. However, it shed all its gains and was trading 3.5% lower at INR 440.20 at 1:07 PM.

Amid a decline in its share prices, Swiggy’s market capitalisation dropped to INR 98,536.45 Cr (about $11.67 Bn).

It is pertinent to note that Swiggy was valued at more than $12 Bn after surging 10.67% in the first trading session. On the other hand, archrival Zomato sits on a market cap of 2.36 Lakh Cr ($28.02 Bn), with its shares up 3.5% today at the time of writing.

After months of anticipation, Swiggy made its stock market debut on November 13, with its shares listing at an 8% premium on the NSE. The stock debuted at INR 420 as against the IPO issue price of INR 390 per share.

Its largest shareholder, Prosus said that it was sitting on gains of $2 Bn from its total investment in Swiggy after having sold shares worth $500 Mn via the IPO.

Swiggy’s public listing comes amid rising competition in the quick commerce space and a boom in sales in the segment, which has prompted even giants like Flipkart, Reliance Retail, and now Nykaa, to launch rapid delivery services.

Operating revenue of Swiggy’s quick commerce business, Instamart, jumped almost twofold to INR 978.5 Cr in the financial year 2023-24 (FY24) from INR 451.3 Cr in the previous year. By comparison, Zomato’s quick commerce vertical Blinkit nearly tripled its operating revenue on a year-on-year (YoY) basis to INR 2,301 Cr in FY24.

It is pertinent to note that both Swiggy and Zomato have come under the scanner of the Competition Commission of India (CCI), the country’s antitrust watchdog, for alleged violations of the country’s competition law.

Meanwhile, JM Financial has initiated its coverage on Swiggy with a ‘buy’ rating and a price target of INR 470, stating it is one of the fastest-growing consumption plays with “multiple levers to move towards sustainable margins”.

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