Macquarie initiated coverage on Swiggy with a bearish outlook on its listing day, despite shares of the food delivery and quick-commerce firm surging over 13 percent on the exchanges.
The global brokerage firm assigned an 'underperform' rating to Swiggy, setting a target price of Rs 325 per share. Macquarie analysts highlighted the company's considerable growth potential but cautioned that its journey toward profitability could be challenging and inconsistent.
The report noted Swiggy’s opportunity to reduce the gap with competitor Zomato. However, Macquarie flagged concerns over the quick commerce segment, describing it as a complex area with uncertain prospects for sustainable profits.
Meanwhile, Swiggy shares listed with a premium of nearly 8 percent against the issue price of Rs 390 on November 13. The stock listed at Rs 412 per share on the BSE, reflecting a jump of 5.64 per cent from the issue price. Later, it surged 7.67 per cent to Rs 419.95.
Swiggy shares debut on NSE at Rs 420 apiece, nearly 8% premium over IPO price
At the NSE, shares of the firm made the market debut at Rs 420, a jump of 7.69 per cent. Later, the counter surged 13.9 percent to hit an intraday high of Rs 444 per share.
At around 11.30 am, the shares of the company were trading at Rs 440.70 per share on the NSE, up nearly 5 percent.
JM Financial Institutional Securities has also initiated coverage on Swiggy, calling it one of India’s fastest growing consumer plays. It recommended a price target of Rs 470, a 20 percent upside from the IPO price.
Going by the draft papers, the company plans to utilise proceeds from the fresh issue for investing in technology and cloud infrastructure; brand marketing and business promotion; and debt payment; and funds will also be allocated for inorganic growth and general corporate purposes.
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