Swiggy makes a grand debut, stock surges 10% on first day of listing

Shares of food delivery and quick-commerce major Swiggy listed with a premium of nearly 8% against their issue price of Rs 390 on Wednesday. Swiggy's stock made its initial listing at Rs 412, reflecting a jump of 5.64% from the issue price on the BSE. At the NSE, shares of the firm made their market debut at Rs 420, rising by 7.69%

The stock had spectacular first day on the bourses as well, closing 10% up at Rs 464 on the NSE, and inching up a significant 16.91% to close at Rs 455.95 on the BSE. The company's last traded GMP had slipped to Rs 1, denoting potentially weak listing day gains for shareholders.

Gaurav Garg, Research Analyst at Lemonn Markets Desk, noted that Swiggy debuted at Rs 420, marking a listing gain of 7.6%, which was far ahead of its grey market premium (GMP) estimate of just 0.26%. "Retail investors showed modest interest, subscribing only 1.14 times, indicating low confidence. Current market conditions have kept many investors on the sidelines, especially as numerous high-quality companies remain 15-20% below their all-time highs.".

"However, for those with a higher risk appetite, Swiggy could be an opportunity to capitalize on the valuation gap between Zomato and Swiggy, with potential gains hinging on Swiggy’s ability to enhance operational efficiency over time," he added.

At close of trade today, Swiggy's total market cap stood at Rs 1,03,863.96 crore on NSE. The Rs 11,327 crore initial public offer of Swiggy got fully subscribed on the final day of the share sale on Friday, ending with a 3.59 times subscription. The initial share sale had a price range of Rs 371-390 a share.

The company's IPO (Initial Public Offering) had a fresh issue of shares worth Rs 4,499 crore, along with an Offer-For-Sale (OFS) of Rs 6,828 crore. QIBs (qualified institutional buyers) made a beeline for the issue, subscribing 6.02x to it. Retail investors subscribed 1.14x to the total offer, while employees seemed far more enthusiastic, with a 1.65x subscription.

Going by Swiggy's draft papers, the company plans to utilise proceeds from the fresh issue for investing in its technology and cloud infrastructure; brand marketing and business promotion; and debt payment. Some funds will also be allocated for inorganic growth and general corporate purposes.

Thanks to this IPO, around 500 current and former employees of the food and grocery delivery behemoth have turned crorepatis. The issue had a reservation of up to 7,50,000 shares for employees, offered at a discount of Rs 25 to the issue price. Per media reports, this has unlocked Rs 9,000 crore worth of ESOPs (employee stock options) for around 5,000 of Swiggy's previous and present employees

Earlier during the day, rival company Zomato's CEO Deepinder Goyal took to social media to welcome Swiggy on the Indian stock exchanges, with a picture showcasing two men, symbolic of Zomato and Swiggy, standing beside each other and facing the Bombay Stock Exchange (BSE) building with the words 'Now Listed...Swiggy'.

Goyal further congratulated Swiggy, while highlighting that there is no better company Zomato could find to work towards serving India with.