• Swiggy's stock market debut saw Prosus and Tencent reap billions, with the company valued over $11 billion.
• Swiggy's shares opened at a 7.7% premium over its IPO price, ending the trading day with a 17% rise.
• CEO Sriharsha Majety expressed optimism for solid growth and expansion plans for Swiggy's Instamart business.
• The successful IPO of Swiggy indicates a strong investor interest in the tech and online food delivery sector.

Swiggy, the Indian online food delivery platform, recently made its stock market debut, marking a significant financial event for global investment group Prosus and Chinese conglomerate Tencent. The company, a rival to Zomato, entered the market with a valuation exceeding $11 billion.

Prosus, which had invested nearly Rs 9,055 crore ($1.07 billion) in Swiggy, made a whopping Rs 26,927 crore ($3.2 billion) from the IPO, netting a profit of $2.12 billion. Tencent, on the other hand, had infused Rs 1,343 crore into the company and made Rs 3,166 crore, marking a profit of more than 135 per cent on the issue price of Rs 390.

Swiggy's shares opened at Rs 420 per share on the National Stock Exchange (NSE), a 7.7 per cent premium over its IPO price of Rs 390. By the end of the trading day, the shares had risen almost 17 per cent to Rs 456 apiece. The company's IPO was oversubscribed by 3.6 times, consisting of Rs 4,499 crore of fresh issue and an offer for sale (OFS) of 17.51 crore shares worth Rs 6828 crore, with a price band of Rs 371-390 per share.

Swiggy CEO Sriharsha Majety expressed optimism about the company's future, stating that they are expecting solid growth over the next 3-5 years. He also mentioned the company's plans to expand its geographical footprint and the store network for its Instamart business.

Prosus and Tencent's Windfall

Prosus echoed this sentiment, stating that Swiggy is on a strong growth trajectory as a public company after diversifying into new categories and expanding into new cities. Despite a subdued market mood and a sluggish response from overall investors, Swiggy's listing surprised market participants.

Prashanth Tapse, Senior VP (Research) at Mehta Equities Ltd, noted that the positive listing and price holding above its issue price of Rs 390 should be seen as strong demand for the company. He added that investors are positive on the space and fear of missing out factors is holding investors not to miss the sector growth story, similar to Zomato post listing trend.

The lead book-runners of the issue were Kotak Mahindra Capital Company, Citigroup Global Markets India, Jefferies India, Avendus Capital, J.P. Morgan India, BofA Securities India, and ICICI Securities. The calculation of the profits made by Prosus and Tencent is based on the issue price of Rs 390, and it may vary with the change of price of the stock exchange.

The Future of Online Food Delivery Platforms

The success of Swiggy's IPO is a testament to the growing acceptance and popularity of online food delivery platforms in India. As Pranav Bhavsar, a co-founder of Trudence Capital Advisors Pvt, noted, these companies already have a good presence and people have gotten used to ordering. It is hard to do away with that once you get used to it. That makes quick commerce a good theme to invest.

The listing of Swiggy follows a similar trend observed in the past where tech-based companies have seen a successful IPO. For instance, Zomato, another Indian food delivery giant, had a successful listing earlier, with its shares more than doubling this year. The success of these IPOs indicates a strong investor interest in the tech and online food delivery sector, which is expected to grow exponentially in the coming years.