Lock-in Expiry for 83% Pre-IPO Shares May Trigger High Volatility, Say Brokerages
If you hold Swiggy shares in your portfolio, it’s time to be cautious. The food delivery platform, recently listed on the stock market, may experience significant volatility around 13 May — the date when the lock-in period for 83% of its pre-IPO shares ends.
According to brokerage houses JM Financial and Macquarie, this could lead to a potential sell-off by early investors, putting pressure on share prices.
Understanding the Lock-In Rule
Lock-in rules vary for different investors:
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Anchor investors: 30–90 days
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Other pre-IPO investors: 6 months
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Promoters: 18 months (if holding up to 20% stake), 6 months (if holding more than 20%)
With a large number of pre-IPO shares becoming free to trade on 13 May, the market could see a surge in supply — possibly leading to a dip in prices.
What Do Brokerages Say?
On 5 May, Swiggy shares were trading around ₹332, up by 9%. However, Macquarie has assigned an “Underperform” rating and set a target price of ₹260 — suggesting a potential 21% downside from current levels.
The firm believes that several pre-IPO investors may exit partially or fully, increasing selling pressure.
Major Foreign Investors in Swiggy:
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Naspers – 25.4%
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SoftBank – 7.6%
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Accel India – 4.1%
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Tencent – 3.3%
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Norwest Venture Partners – 2.8%
A partial or full withdrawal by these large foreign institutional investors (FIIs) could significantly impact the stock.
Zomato Emerges as a Stronger Contender
In contrast, Macquarie is bullish on Swiggy’s rival Zomato, highlighting its stronger fundamentals and confident management commentary. Concerns remain around Swiggy’s InstaMart segment, which may hurt the company’s overall financial health.
Swiggy’s stock is currently trading about 22% below its IPO price, though early-stage VC and PE investors are still in profit territory.
Would you like a comparative analysis of Swiggy and Zomato shares next?
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