Swiggy shares may face near-term pressure as lock-in expiry looms, JM Financial retains buy rating
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Swiggy’s stock may face heightened volatility in the near term as the expiry of a major pre-IPO shareholder lock-in period approaches, according to brokerage JM Financial. The lock-in, which ends on May 12, will make around 83% of the company’s shareholding eligible for trade for the first time, raising the potential for large-scale offloading. On Thursday, shares of the food and delivery giant slipped as much as 1.6% to Rs 342.4 on the BSE. JM Financial estimated that even if just 15% of the locked-in shares are sold post expiry, it could result in outflows worth Rs 120 billion — nearly equivalent to the company’s total IPO size of Rs 113 billion. Many pre-IPO investors, including private equity and venture capital firms, are sitting on substantial unrealised gains, and despite Swiggy’s stock trading about 12% below its IPO price of Rs 390, some may be inclined to exit. "While we cannot accurately predict when these shareholders wil...