Swiggy shares plunge 7% to hit record low as lock-in expires for 83% shareholders

Swiggy shares slumped 7.27% on Tuesday to hit an all-time low of ₹297 on the NSE, down from the previous close of ₹320.3. The sharp decline followed the expiry of the six-month lock-in period for non-promoter, pre-IPO investors, triggering heavy selling pressure.

The stock opened at ₹305, down 4.7% from the previous close, and is currently trading at ₹311.35. The stock has declined 45% since January.

The lock-in period expired on May 12, making 83% of the company’s shareholding eligible for secondary market trading, starting today.

The drop came primarily because of the company’s disappointing Q4 results, which weighed on investor sentiment. According to SEBI, non-promoter, pre-IPO shareholders are subject to a mandatory six-month lock-in after listing, during which they cannot sell their holdings. While the end of the lock-in doesn’t mandate liquidation, it enables early investors to exit their positions, often leading to increased volatility and selling in the stock.

“The stock is likely to remain under pressure in the near term due to weak 4Q results as well as upcoming expiry of pre-IPO shareholder lock-in on 12th May,” said JM Financial Institutional Securities Ltd. in a research note, while lowering its growth and valuation assumptions for Instamart but maintained its outlook for the food delivery segment.

Swiggy’s fourth-quarter results showed a mixed performance between its two main businesses—food delivery and quick commerce (Instamart). The food delivery segment performed strongly, growing 17.6% year-on-year, and delivered solid margin improvements.

On the other hand, Instamart’s order value grew by 101% year-on-year, slower than the overall market. More importantly, its profitability worsened more than expected. Combined with a rise in employee stock option costs, Swiggy’s overall operating loss rose to ₹960 crore, higher than the estimated ₹860 crore and up from ₹730 crore in the previous quarter.

However, the brokerage stated that investments in Instamart appear to have peaked in the fourth quarter, and profitability may start improving due to better use of warehouses and scale benefits. Still, this could come at the cost of losing some market share in the next financial year.

“That said, it appears QC growth investments have peaked out in 4Q and profitability in the business could recover hereon aided by improvement in store/warehouse utilisation rates and operating leverage, albeit it could lead to further share loss in FY26,” the note added.

Looking ahead, the brokerage firm said that Swiggy’s overall losses are expected to narrow, supported by ongoing improvements in its food delivery margins. Despite short-term pressure on the stock from weak quarterly results and the expiry of the pre-IPO shareholder lock-in, long-term investors may find this an attractive entry point. At current prices, the market seems to be valuing only the food delivery business, while Instamart and other ventures are being overlooked.