Swiggy Shares Jump 19% on Debut, Market Valuation Crosses ₹1 Lakh Crore

Shares of Swiggy, the popular online food delivery and quick commerce platform, made an impressive debut on the stock exchanges on November 13, 2024, as they surged by approximately 19% following a modest listing. 

Shares of Swiggy surged as much as 19.44% on the NSE, reaching a day’s high of ₹465.80 on Wednesday, November 13, after a modest debut in the morning.

The company’s initial public offering (IPO) saw its shares listed at ₹420 per share on the National Stock Exchange (NSE), a premium of 7.69% over the IPO issue price of ₹390. On the Bombay Stock Exchange (BSE), Swiggy shares opened at ₹412 per share, reflecting a 5.6% premium, and later climbed to 7.67% to ₹419.95.

Swiggy's market valuation briefly crossed the ₹1 lakh crore mark, with its market capitalisation reaching ₹1,03,203.61 crore. The company's valuation settled at ₹102,073 crore on Wednesday. 

Shortly after listing, around 10:20 am, Swiggy shares faced a downturn, dipping nearly 5% to trade at ₹400.45 on the NSE, a 4.65% drop. This early volatility in Swiggy's performance highlights mixed investor sentiment amid broader market fluctuations.

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The company’s ₹11,327 crore IPO, which was fully subscribed on the last day of the share sale, saw a strong investor response, with a subscription of 3.59 times the offered shares. The IPO had a price band between ₹371 and ₹390 per share.

The online food delivery sector, in which Swiggy operates, has been on a significant growth trajectory. From a market size of ₹112 billion in 2018, the Indian online food delivery market expanded to ₹640 billion by 2023. This growth is driven by factors such as rising incomes, increasing urbanisation, and changing lifestyle preferences.

As per the IPO draft documents, Swiggy plans to utilise the funds raised through its share sale for various initiatives, including enhancing its technology and cloud infrastructure, strengthening its brand marketing efforts, repaying debts, and exploring opportunities for inorganic growth.

The company’s IPO was managed by several leading financial institutions, including Kotak Mahindra Capital Company Ltd, Citigroup Global Markets India Pvt Ltd, JP Morgan India Pvt Ltd, BofA Securities India Ltd, Jefferies India Pvt Ltd, ICICI Securities Ltd, and Avendus Capital Pvt Ltd.

To Summarize

Swiggy shares made a robust debut on the stock exchanges, exceeding the modest expectations set by the grey market. Despite initially showing a flat grey market premium (GMP), the stock opened at a solid premium, catching market observers by surprise.

The company’s strong debut and subsequent surge reflect investor confidence in the company’s potential. Despite some early ups and downs, Swiggy’s share performance highlights its potential in a digital-driven economy.