SoftBank-backed Swiggy’s (SWIG.NS), shares jumped nearly 15% in their trading debut in India on Wednesday, signalling growing investor confidence in food and grocery delivery firms as shoppers increasingly go online and want fast deliveries.
Swiggy’s shares bucked weakness in the broader Indian market and recorded a better performance than some analysts had predicted for the loss-making firm after its $1.4 billion IPO – the country’s second biggest this year.
The stock (SWIG.NS), listed at 420 rupees ($4.98) on India’s National Stock Exchange and rose to a high of 448 rupees, giving the company a valuation of nearly $12 billion.
Swiggy and its main rival Zomato are riding a wave of new shoppers in India by offering so-called “quick commerce” grocery deliveries within 10 minutes, diversifying from their main food delivery businesses.
The boom in quick commerce sales has hurt supermarket revenues and forced players including Mukesh Ambani, Asia’s richest man, to [USN:L4N3LM1RO TEXT:“launch a faster delivery service”] from his retail stores in India.
Swiggy’s quick commerce service Instamart has seen “explosive growth,” Anand Kripalu, its board member, said at the listing ceremony at the National Stock Exchange in Mumbai.
Dutch tech investor Prosus (PRX.AS), which owns 25% of Swiggy, said on Wednesday it had made $2 billion on its investment in the company. SoftBank holds a roughly 8% stake.
The listing comes as both Swiggy and Zomato face [USN:L1N3MF0DR TEXT:“antitrust scrutiny”] over potential breach of competition laws in the food delivery business and calls from retail groups that their quick commerce business be investigated for alleged [USN:L4N3LW047 TEXT:“predatory pricing”].
The Swiggy IPO was [USN:L1N3MF09O TEXT:“oversubscribed”] by more than three-fold last week, helped over the line by institutional investors rushing in with orders on the final day of the sale.
Swiggy’s debut still pales in comparison with Zomato’s (ZOMT.NS), blockbuster [USN:L4N2OZ0L3 TEXT:“listing”] in 2021. Zomato shares have more than tripled since then.
But while Swiggy has narrowed its annual losses, it has yet to turn a profit, whereas Zomato posted a fiscal 2024 profit after a loss the previous year.
Source: www.reuters.com
The post Swiggy delivers 15% jump in India debut as investors bet on quick commerce appeared first on Ghanaian Times.
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