Swiggy Launches on Stock Market with a 7.69% Premium Over IPO Price

Foodtech giant Swiggy made its much-anticipated debut on the National Stock Exchange today, opening at Rs 420 per share—7.69% above its IPO price of Rs 390. The IPO attracted substantial interest, oversubscribed by 3.6 times, comprising a fresh issue of Rs 4,499 crore and an offer for sale (OFS) of 17.51 crore shares valued at Rs 6,828 crore, priced within a range of Rs 371-390 per share.

Investor Windfalls and Strong Backing

Swiggy has garnered strong support from major investors, including Prosus, Accel, Elevation, and Tencent, whose substantial investments have yielded promising returns. According to Swiggy’s draft red herring prospectus (DRHP), Prosus, a leading investor in the company, invested approximately Rs 9,055 crore ($1.07 billion) and secured a significant return of Rs 26,927 crore ($3.2 billion) from the IPO, marking a profit of $2.12 billion. Tencent, another major backer, invested Rs 1,343 crore and earned Rs 3,166 crore from the listing, yielding a 2.35X return.

SoftBank also had a prominent stake in Swiggy, investing around Rs 6,743 crore ($800 million), with Tencent’s stake valued at Rs 3,165 crore ($377 million) at the time of IPO. These high returns reflect the strong performance of Swiggy as a food delivery leader and the continued confidence of global investors.

Substantial Gains for Swiggy Employees and Future Expansion Plans

Swiggy’s IPO success extends to employees, with approximately 500 team members eligible to cash out an estimated Rs 9,000 crore through Employee Stock Ownership Plan (ESOP) payouts. This underscores Swiggy’s commitment to sharing its success with its workforce and incentivizing continued growth.

Currently trading at Rs 445.45 per share, Swiggy has achieved a market capitalization of Rs 99,745 crore, or about $11.87 billion—an 18.4% increase from its last valuation of $10 billion when it filed its DRHP. The listing marks a major milestone for Swiggy as it expands its Instamart grocery business and looks to strengthen its geographical reach.

Swiggy’s CEO, Sriharsha Majety, expressed confidence in the company’s growth trajectory, stating, “We are expecting very solid growth over the next 3-5 years. We are expanding our geographical footprint and the store network for our Instamart business.”

IPO Preceded by Anchor Investments

Ahead of its listing, Swiggy secured over $600 million from a group of anchor investors, including BlackRock, Fidelity, SBI Mutual Fund, ICICI Prudential Mutual Fund, HSBC, Nomura, BNP Paribas, and Allianz Global, setting a strong foundation for its market debut.

Competitive Landscape with Zomato

In comparison, Swiggy’s archrival Zomato currently holds a market cap of $27.23 billion, more than twice Swiggy’s current valuation. However, with robust backing and strategic growth plans, Swiggy appears well-positioned to narrow this gap in the coming years.

Swiggy’s listing represents a significant milestone for the Indian foodtech space, bringing new opportunities for investors and employees alike while laying the groundwork for sustained growth and competition within the sector.