Swiggy shares plunge below IPO price amid continued market losses
What's the story
Swiggy, one of India's leading food delivery platform, has witnessed a major fall in its share value. The company's shares fell 4% on Tuesday, continuing the fall from the post-listing peak. It had fallen 9% on Monday and 2.5% last Friday. The stock has now fallen below its IPO price of ₹390, hitting an intraday low of ₹389. This marks a significant drop of over 37% from its post-listing high of ₹617.
Market impact
Swiggy's stock performance mirrors industry challenges
Swiggy's shares have declined in five of the last six trading sessions, falling a total of 15%. The market performance is indicative of the larger challenges facing the food delivery industry. The pressure on Swiggy's shares mounted after its rival Zomato revealed a slowdown in its core food delivery business during its December quarter results announcement last week. Zomato shares have crashed 25% in one month due to continued selling pressure in the Indian stock market and gloomy quarterly results.
Strategic shift
Zomato's strategy shift and its impact on Swiggy
Zomato also announced plans to increase investments in its quick commerce venture Blinkit, hoping to meet its 2,000 dark stores target a year ahead of time. However, this will likely keep Blinkit in the red for the foreseeable future. Swiggy, on the other hand, is yet to announce when it will hold its board meeting to announce results for the December quarter.
Analyst views
Analysts' outlook on Swiggy's stock remains mixed
Despite the recent market performance, analysts' views on Swiggy's stock remain mixed. Out of 15 analysts tracking Swiggy, 10 have a "buy" rating on the stock, two have recommended a "hold," while three have issued a "sell" rating.