Swiggy Shares Plummet for Fourth Day, Fall Below IPO Price
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Synopsis
Swiggy's shares have fallen for the fourth consecutive day, dropping below their IPO price of Rs 390 due to higher-than-expected losses. Market capitalization has declined as investors react to the company's financial reports.
Key Takeaways
- Swiggy's shares have dropped below their IPO price of Rs 390.
- Stock has seen a 40 percent decrease from its peak.
- Net loss reported for Q3 FY25 is Rs 799 crore.
- Company’s operational revenue increased by 31 percent.
- Macquarie sets a bearish target price of Rs 325.
Mumbai, Feb 7 (NationPress) After a fourth consecutive day of decline, shares of the online food delivery service Swiggy have dropped below the initial public offering (IPO) price of Rs 390 on Friday.
Market analysts attribute the stock's downturn to investors reacting to the company's unexpectedly high losses in the third quarter (Q3 FY25).
After reaching a peak of Rs 397.65 and dipping to Rs 374.8, the stock saw a decrease of 2.5 percent, settling at Rs 379.20 during intra-day trading on the BSE.
Global financial services firm Macquarie has been particularly bearish on this stock, setting a target price as low as Rs 325.
Currently, Swiggy’s stock has plummeted nearly 40 percent from its peak of Rs 617, which was recorded on December 23, 2024.
This ongoing decline has caused Swiggy’s total market capitalization to fall below Rs 90,000 crore, as per the latest data from the BSE.
The company went public on November 13, 2024, at an issue price of Rs 390 each, as part of a Rs 11,327.43 crore fundraising initiative in the primary market.
Initially, the stock debuted at Rs 420, marking an 8 percent gain from the issue price. However, it has since dropped 10 percent below its debut price.
In its latest report, Swiggy disclosed a net loss of Rs 799 crore for the quarter ending December 31 (Q3 FY25), reflecting a 39 percent increase from the Rs 574 crore loss incurred during the same quarter last year (Q3 FY24).
Despite the increasing losses, the company’s operational revenue rose by 31 percent year-on-year (YoY), amounting to Rs 3,993 crore in Q3, compared to Rs 3,049 crore in the corresponding period last year.
According to Sriharsha Majety, MD and Group CEO of Swiggy, "The consistent growth in food delivery margins and cash flow generation is counterbalanced by ongoing investments in Quick-commerce, including the expansion of dark stores and marketing, amid high competitive pressures in the short term," he stated in a filing.
