Swiggy IPO Listing Day Strategy | Swiggy IPO GMP | Swiggy IPO Hold or Sell?
The Swiggy IPO allotment is out, and the listing is just around the corner. Those who have received the IPO allotment are eager to know the strategy for listing day. The key questions are whether to hold the shares or book profits on listing day.
Overview of Swiggy’s Business Model
Swiggy is a well-known food delivery service that has now expanded to deliver groceries and household goods. It connects consumers with a wide range of businesses for direct-to-home deliveries. Besides food, Swiggy now operates in supply chain logistics, offering diversified services. However, despite its vast business model, Swiggy is still a loss-making company. While revenues have shown growth, profitability has not been achieved. The company has minimal debt but lacks net profit, which can be a concern for investors.
Swiggy IPO Allotment and Listing Details
The Swiggy IPO price was set at ₹390 per share, with each lot consisting of 38 shares. The total IPO size is ₹1137 crore. Swiggy’s shares will be listed on both NSE and BSE. Only 10% of the IPO portion was reserved for retail investors, resulting in fewer allotments. In total, around 76,248 retail investors received allotments.
Listing Day Strategy – Hold or Sell?
The current Grey Market Premium (GMP) for Swiggy’s IPO is showing minimal gains, and the market sentiment is bearish. GMP indicates that the listing price is likely to be around ₹390-₹392, resulting in almost flat or marginal gains. For those aiming for listing gains, it may be wise to book a small profit upon listing.
If the listing price offers a slight gain, such as between ₹392-₹395, you could consider booking partial profits and holding onto some shares. Setting a trailing stop loss might also be beneficial, allowing you to move the stop loss higher as the price increases.
Don’t Expect a Strong Price Rally Immediately
Despite Swiggy’s popularity, a large initial price rally on listing day is unlikely since the company remains unprofitable. For short-term investors, holding Swiggy shares may be risky due to limited prospects for quick gains.
Tips for Long-Term Investors
Those who believe in Swiggy’s growth potential and wish to hold long-term should prepare for price volatility. Patience will be key as there could be dips in the stock price. Swiggy’s diversified business model has growth potential, but it may take time to achieve profitability.
For long-term investors, a gradual buying strategy, where you purchase shares in phases when prices are low, may yield better results in the future. This allows you to average out your buying cost and benefit from any future gains.
Buying Strategy for Those Without Allotment
For investors who missed the IPO allotment, it’s essential to observe the listing price movement. If the price falls below ₹390, a gradual entry approach could be beneficial. However, short-term entry in Swiggy may be risky, so waiting for the company’s quarterly results to reflect improvement before buying could be wise.
Swiggy has strong potential, but expect volatility in the stock. Investors looking to buy after listing may consider a staggered buying strategy, purchasing shares in small quantities rather than investing all at once.
Swiggy IPO All-Round View
- Short-term Strategy: Those who applied for listing gains should consider booking a profit if the listing is near the IPO price, or booking partial profits.
- Long-term Investment: Investors who see growth potential in Swiggy’s business model can hold the shares long-term. However, they should be prepared for volatility and potential interim losses.
- New Investors: Investors looking to buy after listing should consider a phased approach. If the stock price falls, gradually accumulating shares can help capitalize on Swiggy’s potential growth.
Final Advice
Swiggy’s IPO listing represents a significant opportunity, but the stock’s movement will be sensitive to market conditions. Both short-term and long-term investors should align their decisions with their risk profile and financial goals. While Swiggy shows promising long-term growth potential, it’s still a high-risk stock, so a carefully considered approach is essential for investing in these shares.
