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Business: Swiggy is to distribute a bountiful dividend to thousands of staff as it makes its stock market debut, listing its shares at 10 a.m. on both the BSE and NSE. Around 500 staff members are to go home with Rs 1 crore each, around Rs 9,000 crore is to be distributed among 5,000 staff members-rewarding years of service and growth contributions, according to a Moneycontrol report.
Swiggy’s IPO has been one of the biggest in India in recent times and much is at stake as India’s startup ecosystem hits this milestone.
While demand from institutional investors has been high, analysts are going cautiously on the Swiggy IPO. Grey market premium or GMP reflects the lukewarm sentiment as the shares are trading at Rs 390 issue price plus Re 1.
Shivani Nyati of Swastika Investmart said that even though Swiggy’s IPO got 3.59 times subscription, the prevailing market volatility and the same reason in terms of valuation, it is a big risk.
“Though interest for IPO is there, the company is in losses and the kind of market we are seeing at present requires caution, ” Nyati of Swastika Investmart said.
Mehta Equities’s senior analyst Prashanth Tapse expects the listing to be “flat to slightly negative” as Swiggy has high competition and a negative cash flow model.
He commented that, “Low demand from retail and NII investors reflects concerns over high competition and negative market sentiment.” Analysts recommend the stock to investors with a high-risk tolerance and long-term view; others should be more cautious.
Today’s listing is a wealth creation event for its employees when it comes to Swiggy. The company will resemble that of Flipkart’s, which rewarded employees with huge ESOP payouts. It is a rare play in India’s startup universe where an IPO will let the early employees who helped scale the company benefit a lot.
Swiggy’s IPO performance is going to be closely watched as trading begins. It flags its position in the high-stakes food delivery and quick commerce sectors.
