Swiggy IPO Debut Surges in Mumbai, Showing Investor Confidence in India’s Quick-Commerce Growth

Swiggy Ltd., one of India’s leading food-delivery companies, saw its shares climb in a strong debut on the Mumbai stock exchange, suggesting high investor confidence in the future of India’s quick-commerce sector. Swiggy’s shares opened at 416.20 rupees, went up to 420.05 rupees, and were priced initially at 390 rupees—the top end of the marketed range. This performance is especially notable given the overall weakness in the market.

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With a $1.3 billion IPO, Swiggy’s listing is the second largest in India this year, following Hyundai Motor India Ltd.’s $3.3 billion IPO. Despite a slow start, Swiggy’s IPO saw a spike in demand from institutional investors at the last moment, reflecting optimism about India’s rapid delivery sector. Swiggy now joins other quick-commerce giants like Zomato, a key competitor, and Zepto, a privately-held company also making waves in the same space. Market analysts predict that these firms could collectively surpass $78 billion in gross orders over the next decade.

Analysts at JM Financial Institutional Securities Pvt. are optimistic, describing quick-commerce as a huge opportunity within India’s retail sector, which was valued at around $1 trillion in 2022. The firm gave Swiggy a “buy” rating, with a target price of 470 rupees, noting the significant potential for growth. Swiggy’s strong listing day performance bucks a recent trend where large IPOs in India have struggled, with most falling around 3% on average during their first trading day since 2019.

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Swiggy’s IPO success contrasts with Hyundai Motor India, whose shares dropped on debut and remain 12% below their IPO price. Swiggy’s impressive debut was also boosted by interest from global investors, including Fidelity International. However, the company faces some challenges ahead. Swiggy is under investigation by India’s antitrust authority, the Competition Commission of India, over allegations of unfair practices. While this probe is still in the preliminary stages, the issue could impact Swiggy’s future growth if concerns escalate.

Despite these challenges, Swiggy’s rise is backed by strong demand for online food and fast delivery services in India, one of the world’s fastest-growing markets. As of March 31, Swiggy held around 37% of the market, closely following Zomato’s 39%, as per data from Chryseum Advisors. Zomato’s stock has performed well, quadrupling since the start of 2023, with most analysts viewing it as a good buy.

You and I... In this beautiful world ❤️ @Swiggy pic.twitter.com/sAFzd8z07E — zomato (@zomato) November 13, 2024

Swiggy’s successful IPO may inspire confidence for upcoming listings in India’s quick-commerce and tech sectors. The company’s promising market debut suggests that investor interest in digital-first companies remains strong, and that India’s booming quick-commerce market has plenty of room for growth.

Also Read: Hyundai to Launch $3 Billion India IPO Next Week at 1,865-1,960 Rupees per Share