Swiggy’s Impressive Stock Performance Post-IPO
Swiggy’s shares climbed 9.4% on Tuesday, reaching a peak of Rs 542.10 on the BSE, marking a 27% increase from its IPO issue price of Rs 390. The food delivery company, which debuted on November 13, will announce its financial results for Q2 FY25 today.
On its listing day, Swiggy’s shares opened at Rs 420 on the NSE and Rs 412 on the BSE, reflecting premiums of 7.7% and 5.6%, respectively, over the IPO issue price.
IPO and Market Performance
Swiggy’s IPO was valued at Rs 11,327 crore, comprising a fresh issue of Rs 4,499 crore and an offer-for-sale worth Rs 6,828 crore. The shares were sold within a price band of Rs 371-390 and received strong investor interest, with a subscription rate of 3.59 times. Retail investors subscribed 1.14 times, while the employee category saw a subscription of 1.65 times.
Despite initial gains, Swiggy’s stock has faced resistance at Rs 542. Analysts noted a support level of Rs 505, with potential downside targets of Rs 441 if the stock closes below this threshold.
Financial Performance and Projections
For FY24, Swiggy reported a net loss of Rs 2,350 crore, narrowing from Rs 4,179 crore in FY23. Revenue doubled during the same period, reaching Rs 11,247 crore compared to Rs 5,704 crore in FY22. In Q1 FY25, the company recorded a total income of Rs 3,310 crore, up from Rs 2,510 crore in the corresponding quarter of the previous year, while its loss widened to Rs 611 crore.
Analysts expect Swiggy to reduce its Q2 FY25 losses to Rs 270 crore from Rs 350 crore in Q1, supported by a projected 6% sequential revenue growth. The company’s co-branded credit card with HDFC Bank has significantly contributed to its financial performance in the food delivery segment.
Market Activity and Developments
Swiggy’s trading volume on the BSE was recorded at 7.20 lakh shares on Tuesday, below its two-week average of 8.85 lakh shares. The total turnover amounted to Rs 37.42 crore, while the company’s market capitalization stood at Rs 1,13,478 crore.
Swiggy is under scrutiny following reports of expanding its Bolt 10-minute delivery service to over 400 cities. The NSE and BSE have requested clarification from the company regarding this development. Swiggy’s response is awaited.
Expert Insights on Stock Trends
Experts have advised caution to investors. Ravi Singh, Senior Vice-President at Religare Broking, recommended booking profits with the stock near its resistance level of Rs 542. Meanwhile, technical analyst AR Ramachandran suggested that a daily close below Rs 505 could trigger a downward movement in Swiggy’s stock price.
