Swiggy, India's largest food delivery company, has made its debut in the stock market as the company's shares opened at ₹420 on the National Stock Exchange, trading 7.69% higher than the issue price of ₹390. Shares on the Bombay Stock Exchange opened at ₹412, 5.64% above the issue price. Since this performance surprised many market analysts, the modest subscription rate of 3.59 times and a lacklustre grey market premium before listing added to the commotion.
IPO Allotment and Market Context
Swiggy's IPO allotment was finalized on November 11. Its shares were credited into the demat accounts of investors on November 12. The Indian internet company had set up its IPO when international investors were pulling back from Indian stocks due to concerns over earnings growth turning down. However, this didn't affect Swiggy's IPO much as institutional buyers placed big-ticket orders in the last day of bidding helped augment overall subscriptions.
While analysts had expected Swiggy's opening within a range of -5% to +10% of its issue price considering the low interest from non-institutional investors and retail participants, initial skepticism with regard to the listing price apart, the positive debut tells of robust backing from qualified institutional buyers and retail investors alike.
Business Overview
Swiggy has been founded in the year 2014 and has quickly become a leader in India's hyperlocal commerce market. Besides food delivery, the company also provides grocery and household items to customers through its platform, Instamart. The prospects for growth of the business are apt, as the market is expected to register a 20% CAGR. Food delivery market already holds a duopoly structure wherein Swiggy has one of the leading places to further expand itself.
JM Financial talks about two massive growth avenues for Swiggy in this dual model of food delivery and Instamart. The established brand value and strong delivery partners' footprint are a reason this company gains an edge in the retail space that is rapidly changing. SEO Headline: Swiggy IPO Debut Hot: Stock Gains 7.07% on Opening Day.
A Good Opening?
Good market debut by Swiggy reflects investor confidence despite the challenging market conditions. Good opening is not only reflecting the strength of business fundamentals of the company but also robust and resilient appetite for quality stocks, which is manifested by institutional investors. As food delivery continues to open up opportunities in this growing sector, Swiggy will be at the forefront since innovative strategies and diversity of offerings will change the face of this industry.
Inputs by Agencies
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