Swiggy shares slide 5% as one month lock-in period expires; 6.5 crore stocks eligible for trade

Shares of online food delivery company Swiggy tumbled nearly 5% in early trade on Wednesday as investors turned jittery after its one-month lock-in period for pre-listing shareholders expired today. As many as 6.5 crore shares, representing 3% of Swiggy's outstanding equity, will become eligible for trading in the secondary market, as per a recent report by Nuvama Alternative and Quantitative Research. 

50 companies are set to have their pre-listing shareholder lifted in the next two months, potentially freeing up shares worth $13.9 billion (₹1.17 lakh crore) for secondary sales. Among the newly listed companies, NTPC Green Energy, Swiggy, Afcons Infrastructure, ACME Solar Holdings, Niva Bupa Health Insurance, Sagility India, and Zinka Logistics will see their one month lock-in expiring in December.  On the other hand, 28 companies, including Hyundai Motor India, Waaree Energies, Bajaj Housing Finance, Swiggy are slated to have their 3-month pre-listing shareholder lifted between December and January.

Early today, Swiggy shares opened 1.6% lower at ₹534.65 on the BSE after ending 1.3% higher at ₹543.55 in the previous session. In the first hour of trade so far, the foodtech stock declined as much as 4.5% to ₹518, while the market capitalisation dropped to ₹1.16 lakh crore.

On Tuesday, the stock gained up to 5% in intraday trade after international brokerage CLSA initiated coverage on recently-listed food delivery player. The brokerage issued a bullish 'outperform' call with a price target of ₹708 per share, a potential upside of 32% from current levels. 

At the current level, Swiggy shares trade 33% higher than its IPO price of ₹390 on the BSE. Swiggy made its stock market debut on November 13, 2024, after raising ₹11,300 crore in the country’s second largest IPO this year, after Hyundai Motor India’s ₹27,870 crore issue. The public issue was subscribed 3.59 times, with the quota reserved for the retail investors receiving 1.14 times bids, while QIB and NII segments subscribed by 6.02 times and 0.41 times, respectively. 

Last week, foodtech unicorn Swiggy released its first earnings report post its listing on the stock exchanges last month. The online food ordering and delivery company’s consolidated net loss narrowed marginally to ₹625.5 crore in the second quarter ended September 30, 2024, as compared to ₹657 crore in the year ago period. The revenue from operations grew 30% YoY to ₹3,601.4 crore in Q2 FY25, from ₹2,763.33 crore in the corresponding period last year. Swiggy’s overall gross order value (GOV) grew 30 % YoY to ₹11,306 crore, while the consolidated adjusted EBITDA loss stood at ₹341 crore represented a reduction in the loss by 30% YoY. Platform average monthly transacting users (MTU) grew 19.2% YoY to 17.1 million.

During Q2 FY25, Swiggy Instamart, the company’s quick commerce platform, witnessed a significantly improved performance where its GOV growth accelerated to 24 % QoQ to reach ₹3,382 crore. The overall orders grew by 21 % QoQ, with orders per dark store per day rising 10% QoQ. Instamart added 12 cities and 52 stores during the quarter and improved its contribution margin by 124 bps QoQ to-1.9 %.

Going ahead, Swiggy Instamart plans to double its dark store count by March 25 (vs. 523 on March 24), while increasing the average size of stores by 30-35%. As a result, the active dark store area will grow to over 2.5 times YoY to reach 4 million square feet by March 25.

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