Swiggy, India’s popular food delivery platform, listed on the stock exchanges today, debuting at a premium price that reflects initial investor optimism despite a backdrop of cautious forecasts from analysts. The company’s IPO saw shares opening at Rs 420 on the NSE, a 7.69% premium over the IPO price of Rs 390, while on the BSE, Swiggy started trading at Rs 412, up by 5.64%.
Mixed Ratings from Analysts and Forecasts for Growth
Despite the positive start, analysts are divided on Swiggy’s performance prospects. Macquarie initiated coverage with an ‘Underperform’ rating, setting a price target of Rs 325, reflecting concerns over profitability. According to Macquarie, Swiggy may face challenges in achieving sustainable economic profits, especially within its quick commerce segment. The firm forecasts that Swiggy could reach EBIT breakeven by FY28 with a projected compound annual growth rate (CAGR) of 23% in core revenue, although profitability remains an area where Swiggy trails its competitor, Zomato.
On a more positive note, JM Financial gave Swiggy a ‘Buy’ rating, setting a target price of Rs 470. The financial institution sees Swiggy benefiting from the duopoly structure in India’s food delivery market, which could lead to steady growth. While JM Financial suggests that investors may want to consider both Swiggy and Zomato, it recommends a preference for Zomato, citing superior execution in key segments.
A Landmark Achievement
Ashutosh Sharma, Head of Growth Investments – India and Asia at Prosus, Swiggy’s major investor, celebrated the listing as a “landmark achievement” for Swiggy and a pivotal moment in India’s digital ecosystem. He commended the company for its significant role in driving behavioural changes and expanding digital consumption among Indian consumers.
Swiggy’s CEO, Sriharsha Majety, expressed optimism about the company’s journey, calling the evolution of Swiggy “nothing short of a miracle.” He emphasized the brand’s role in helping consumers embrace economic growth amid the pressures of urban expansion.
Early Swiggy Partner Shares Inspirational Journey
At the listing ceremony, Jigar, an early delivery partner with Swiggy, spoke about his life-changing journey with the company. Over the past seven years, Swiggy enabled him to achieve personal milestones, including clearing debts, supporting family obligations, and purchasing a home. His story underscores the positive impact that Swiggy’s growth has had on the livelihoods of its workforce.
Looking Ahead: Growth Potential and Investor Sentiment
Swiggy’s IPO received a lukewarm response, reflecting mixed investor sentiment. Although institutional buyers showed strong interest toward the close of the subscription period, investor enthusiasm was tempered by Swiggy’s ongoing cash flow challenges, competitive landscape, and market conditions.
In the pre-open trade, Swiggy’s stock was trading at Rs 370.10 on the BSE, rising to Rs 411 before the official listing. With varied forecasts and the potential for price volatility, Swiggy’s market performance will be closely watched by investors and industry players alike.
