On Tuesday, Zomato extended a warm and somewhat playful greeting to its rival, Swiggy, as the latter made its debut on the Indian stock market. Zomato took to social media platform X, posting a message that read, “You and I... In this beautiful world.” The post was accompanied by a striking image featuring delivery personnel from both Zomato and Swiggy standing side by side in front of the Bombay Stock Exchange (BSE) building. This was a subtle yet friendly nod to the fierce competition between the two food delivery giants, showing a spirit of camaraderie despite their rivalry. The accompanying banner proudly displayed Swiggy’s official listing, marking a significant moment for the company.
Swiggy’s much-anticipated IPO successfully opened on the BSE and National Stock Exchange (NSE), with shares listed at Rs 420 on the NSE, reflecting a 7.69% premium over the IPO price of Rs 390. This exceeded initial expectations and showed strong demand for Swiggy’s shares from the outset. The IPO price band had been set between Rs 371 and Rs 390 per share, with the company raising a substantial Rs 11,327 crore from the offering. This massive sum was driven by high levels of institutional investor interest, particularly from Qualified Institutional Buyers (QIBs), who oversubscribed their portion of the offering by a factor of 6.02 times.
The offering was oversubscribed by 3.59 times overall, but the retail category saw a more moderate response, with a subscription rate of 1.14 times. Non-institutional investors, including high-net-worth individuals, showed significantly less enthusiasm, with their subscriptions lagging at 0.41 times. Nonetheless, Swiggy's successful listing provided substantial returns for its major backers, such as the global investment firm Prosus NV. This IPO has not only boosted Swiggy's market presence but also highlighted the growing investor confidence in India’s burgeoning tech and startup sectors.
Swiggy’s IPO marks the 50th mainboard IPO of 2024 on the NSE, underlining the ongoing interest in India's vibrant startup ecosystem, particularly in the technology and e-commerce spaces. Despite this significant milestone for Swiggy, broader market conditions remained under pressure, with the BSE Sensex falling by over 170 points to 78,495 and the Nifty50 dipping 61 points to 23,822 in early trade. In contrast, Zomato, Swiggy’s direct competitor, saw its own shares rise by nearly 1% during early trading, possibly benefiting from the positive market sentiment surrounding Swiggy’s IPO.
Swiggy's market debut is not just about the company's entrance into the stock market, but also a demonstration of the growing maturity and attractiveness of India’s tech sector. With startups and tech companies continuing to perform well in the stock market, this event will likely pave the way for more IPOs in the coming months, especially from firms in the food delivery, e-commerce, and other digital-first industries. For Zomato, it remains to be seen how it will adjust to this new phase of competition, with both companies now having public market backing to further fuel their rivalry.
