Swiggy opens strong on NSE, delivers high returns for Prosus, Tencent

Foodtech giant Swiggy debuted on the stock market today, opening at Rs 420 per share on the National Stock Exchange, a 7.69% premium over its IPO price of Rs 390.

Swiggy’s IPO was oversubscribed by 3.6 times which comprised of Rs 4,499 crore of fresh issue and an offer for sale (OFS) of 17.51 crore shares worth Rs 6828 crore with the price band of Rs 371-390 per share.

Swiggy has been one of the strongest bets for Prosus, Accel, Elevation, Tencent, and other investors. According to the DRHP, Prosus invested around Rs 9,055 crore ($1.07 billion) in Swiggy and made a total of Rs 26,927 crore ($3.2 billion) in IPO, marking a $2.12 billion profit from its investment.

On the other hand, Tencent has invested Rs 1,343 crore and made Rs 3,166 crore, marking 2.35X return. Meanwhile, SoftBank and Tencent’s investment reached around Rs 6,743 crore ($800 million) and Rs 3,165 crore ($377 million) respectively.

Note: The calculation is based on the issue price of Rs 390, it may vary with the change of price of stock exchange.

Besides benefiting investors, the Swiggy IPO will also provide substantial rewards to 500 employees, who may cash out around Rs 9,000 crore through ESOP payouts.

Swiggy is currently trading at Rs 445.45 per share with the market capitalization of Rs 99,745 crore or $11.87 billion. This is an 18.4% increase from its last valuation of $10 billion at the time of filing its draft red herring prospectus.

Swiggy’s CEO, Sriharsha Majety, anticipates strong growth for the company. “We are expecting very solid growth over the next 3-5 years. We are expanding our geographical footprint and the store network for our Instamart business,” said Majety after the listing ceremony.

Ahead of the listing, Swiggy also secured more than $600 million from a group of anchor investors, including BlackRock, Fidelity, SBI Mutual Fund, ICICI Prudential Mutual Fund, HSBC, Nomura, BNP Paribas, and Allianz Global.

Swiggy’s archrival, Zomato, has a market cap of $27.23 billion, more than twice that of Swiggy’s current market cap.