Swiggy shines. Is the listing day curse of India's 'big' IPOs over?

Investors as well as subscribers of Swiggy IPO were nervous till the listing on Wednesday due to the recent cases of public offerings not performing well on their market debut. However, they were left surprised when shares of the food delivery giant listed at 5.64 per cent premium to its initial public offer of Rs 390, becoming the first company with issue size of over Rs 10,000 crore to have listed above the offer price in a decade.

On the first day of trading, Swiggy’s stock closed 17 per cent above its issue price at Rs 455.95, even as BSE Sensex fell nearly 1,000 points.

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On Wednesday (November 13), Swiggy shares, which was sold at Rs 390 during the IPO, opened the day’s trade at Rs 412 on the BSE, hit an intraday high at Rs 465 before closing at Rs 456.

The rally took Swiggy’s market capitalisation to Rs 1.2 lakh crore on the first trading day, making it the 86th most valued listed company in India.

On the other hand, Swiggy’s competitor Zomato has a market cap of Rs 2.3 lakh crore and is the 38th most valued listed company in the country.

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On the day 1 of trading, more than 12 crore shares of Swiggy were traded on the BSE and the NSE combined.

Swiggy’s Rs 11,327-crore IPO, the country’s sixth largest, closed last week with a subscription of 3.6 times the shares on offer. This was driven by demand from institutional investors.

Investors had placed bids for 57.53 crore shares in the issue, against the 16.01 crore shares offered by the company. It had also raised Rs 5,085.02 crore from 151 anchor investors on November 5.

Swiggy is the only company apart from Coal India with IPO size of over Rs 10,000 crore to have listed above the issue price. Other companies with large IPOs including Hyundai Motor India, LIC, Paytm, GIC and SBI Cards and Payments, all have listed below issue price.

IPO market in India has seen some massive public offerings, with several surpassing the Rs 10,000 crore mark. While many have promised great returns, not all managed to deliver. Some of India’s biggest IPOs, including Hyundai Motor India, Paytm have resulted in losses for investors.

Hyundai Motor India IPO worth Rs 27,870.16 crore is India’s biggest IPO till date and was launched on October 15. Its shares made a muted debut on the stock exchanges on October 22 as the shares were listed at Rs 1,931 on BSE, a discount of 1.5 per cent to the issue price of Rs 1,960 per share.

Similarly, LIC’s Rs 21,000 crore worth IPO launched in May 2022, debuted at a discount of over 8 per cent to its issue price of Rs 949 per share.

In November 2021, One97 Communications, the parent company of fintech giant Paytm, launched its IPO and despite high anticipation, its stock listed at a 9 per cent discount.

Paytm share’s post-listing performance suffered due to doubts over profitability and expensive valuations.

SBI Cards made its debut in March 2020 with a Rs 10,355 crore IPO. The shares were listed at a 13 per cent discount to its issue price of Rs 755, mainly due to the broader market sell-off and valuation concerns. The stock is still down more than 8% from its issue price.

With inputs from agencies.