Swiggy IPO: Early trading volatility reveals investor caution amid persistent losses
Swiggy’s positive listing on the Indian stock market has stirred up notable excitement but early trading volatility reveals investor caution, market watchers said on Wednesday.
Swiggy’s share opened at Rs 420 per share on the National Stock Exchange, a 7.7 per cent premium over its IPO price of Rs 390. At closing, Swiggy’s shares settled almost 17 per cent higher at Rs 456 apiece on the NSE.
“While there's optimism about Swiggy’s potential to capture further market share in India’s evolving food delivery and quick commerce segments, the road to profitability may be bumpy,” said Bajaj Broking Research.
Swiggy has shown impressive growth potential, yet persistent losses over recent fiscal years signal challenges ahead.
“Investors may need to brace for a dynamic journey as the company seeks to balance expansion with sustainable financial performance,” added the brokerage.
In the past three fiscal years, Swiggy has consistently reported losses on a standalone and consolidated basis. In FY 2021-22, the total revenue was Rs 6,119.78 crore, with a net loss of Rs 3,628.90 crore.
The following year, FY 2022-23, saw an increase in total revenue to Rs 8714.45 crore, but the net loss also increased to Rs 4,179.31 crore. In FY 2023-24, the total revenue rose further to Rs 11,634.35 crore, while the net loss was reduced to Rs 2,350.24 crore.
In the June quarter of FY 2024-25, the company recorded a total revenue of Rs 3,310.11 crore and a net loss of Rs 611.01 crore.
Swiggy is yet to post quarterly results for Q2 FY25.
“These figures indicate that the company has been experiencing continuous financial losses over the reported periods,” said Bajaj Broking.
Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd, said that allotted investors can hold it for long term despite knowing short term volatility and competitive pressures in the sector.
“For non-allottees, we advise to wait and watch for the price to settle and revisit to buy near issue price if we get due to market selloff pressure,” he mentioned.
