Swiggy shares close up 17 per cent, market cap crosses Rs 1-lakh crore mark

Food-tech unicorn Swiggy, which made a market debut on Wednesday at a modest 7.7% premium over its upper band issue price, saw its shares close 16.92% higher, even as the benchmark indices Sensex and Nifty slipped over 1% amid a broader market weakness.

The company’s shares closed at Rs 456 on the NSE, registering a market capitalisation of about Rs 1.03 lakh crore. Shares opened at Rs 420 against its IPO price of Rs 390.

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The market debut exceeded expectations, as earlier analysts had forecast a muted listing based on the grey market performance.

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The company said it has doubled the categories for quick commerce in the last 12 months, expecting solid growth in the next 3-5 years, and plans to expand its geographical footprint and stores network for the Instamart business.

“We are expecting very solid growth for the next 3-5 years. We are expanding our geographical footprint, stores network for Instamart business,” Swiggy CEO Sriharsha Majety said after the listing ceremony.

Analysts at the global brokerage firm Macquarie initiated coverage of Swiggy shares with an ‘underperform’ rating, recommending a price target of Rs 325 per share.

JM Financial initiated its coverage with a ‘buy’ rating with a target price of Rs 470. “Despite having ceded some space to competition, it is one of the fastest-growing consumption plays with multiple levers to move towards sustainable margins,” it said in a note.

“Despite a subdued market mood and sluggish response from overall investors, Swiggy listing surprised the market participants,” said Prashanth Tapse, senior V-P (research) at Mehta Equities, who recommends holding the stock for the long term.

“This shows investors are positive on the space and the fear of missing out factor is holding investors not to miss the sector growth story, similar to Zomato post listing trend,” he added.

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