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Shares of Indian food and grocery delivery firm Swiggy jumped nearly 15% in their trading debut on Wednesday, bucking weakness in the broader market and a better performance than some analysts had predicted for the loss-making firm after its $1.4 billion IPO.

The stock had listed at 420 rupees ($4.98) on India's National Stock Exchange and rose to a high of 448 rupees by late morning, compared to its issue price of 390 rupees, even as the country's benchmark indexes slid after a spike in inflation dampened bets on interest rate cuts. [.BO]

Swiggy's IPO, India's second-largest share sale this year, was 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.

At the day's high, the company had a valuation of $11.9 billion.

"The listing reflects a degree of optimism about Swiggy's long-term growth prospects, driven by its strong brand recognition, extensive network, and dominant position in the food delivery market," said Shivani Nyati, head of wealth at Swastika Investmart.

"However, the company's continued losses and the challenging market conditions may temper investor enthusiasm in the long term," Nyati added.

Swiggy's debut still stands in sharp contrast to rival Zomato's blockbuster listing in 2021. Zomato shares have more than tripled since then.

Swiggy and Zomato dominate India's food delivery market, with estimated market shares of 34% and 58%, respectively.

But while Swiggy has narrowed its annual losses, it has yet to turn a profit, whereas Zomato has already posted a fiscal 2024 profit after a loss the previous year.

Macquarie Capital analysts initiated coverage on the company with an "underperform" rating, saying "despite a strong potential growth runway and an improving margin profile, we believe Swiggy still has a long and winding road to profitability".

Macquarie has set a target price of 325 rupees on the stock, nearly 17% lower than Swiggy's IPO price.

($1 = 84.3990 Indian rupees)