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Swiggy's shares up 2.5% in trading debut after $1.4 bln IPO

Shares of Indian food and grocery delivery company Swiggy increased 2.5% in their trading debut on Wednesday, after its $1.4 billion IPO last week, however pared preliminary gains on concerns about its course to success.

The stock listed at 420 rupees ($ 4.98) on India's National Stock market, compared to its problem rate of 390 rupees, before quiting some gains in a wider market that slid after a spike in inflation moistened bets on interest rate cuts.

The stock had jumped 7.7% in pre-open trade.

Swiggy's debut stands in sharp contrast to rival Zomato's. smash hit listing in 2021. Zomato shares have more. than tripled ever since.

Swiggy and Zomato dominate India's food delivery market,. with approximated market shares of 34% and 58%, respectively.

But while Swiggy has narrowed its annual losses, it has yet. to turn a profit, whereas Zomato has already posted a financial. 2024 earnings after a loss the previous year.

Regardless of a strong potential development runway and an. improving margin profile, we believe Swiggy still has a long and. winding roadway to profitability, said Macquarie Capital experts. who initiated coverage on the company with an underperform. ranking.

Macquarie has actually set a target rate of 325 rupees on the. stock, nearly 17% lower than Swiggy's IPO price.

Swiggy's IPO, India's second-largest share sale this. year, was

oversubscribed

by more than three times, assisted over the line by. institutional financiers rushing in with orders on the last day. of the sale.

(source: Reuters)