Swiggy stock tumbles 6% in biggest 1-day crash in over 2 months. What triggered the sharp slide?

Swiggy, the popular food delivery aggregator, saw its shares tumble 5.64% in intraday trade on Friday (April 25), hitting a one-week low of ₹321.40 apiece. The decline also marked the biggest one-day fall in Swiggy's share price since February 14.

The stock has been volatile in recent trading sessions due to market speculation around possible exits by some pre-IPO shareholders, whose lock-in period is set to expire on May 12, 2025.

According to SEBI regulations, non-promoter pre-IPO investors are subject to a mandatory six-month lock-in period following the stock’s listing on the exchanges. In its latest note, domestic brokerage firm JM Financial stated that 83% of Swiggy’s shareholding will become eligible for secondary trade for the first time once the lock-in ends. This means those shares will be available for trading from May 13 onwards.

The brokerage’s analysis of the cost of acquisition of shares held by pre-IPO investors indicates that several of them are sitting on substantial, multi-fold gains. While a few investors partially exited their positions during the IPO and in the lead-up to the listing, a significant portion of those gains remains unrealized.

On the fundamentals front, JM Financial expects Swiggy’s adjusted EBITDA loss in its quick commerce business, Instamart, to increase in the near term. The loss is projected to rise from ₹5.8 billion in Q3 to ₹7.8 billion in Q4, largely due to a sharp ramp-up in dark store count and heightened competitive intensity.

Swiggy faces near-term volatility amid lock-in expiry; brokerages split on long-term outlook

JM Financial expects near-term pressure on Swiggy’s stock to persist due to volatility arising from the upcoming lock-in expiry. However, the brokerage noted that long-term investors with strong conviction in India’s hyperlocal delivery market could use these liquidity events as an opportunity to build a sizeable position.

As a result, JM Financial has retained its 'Buy' rating on the stock, with a target price of ₹500. The brokerage expects Swiggy’s adjusted EBITDA loss in its quick commerce business (Instamart) to rise in the near term. According to its estimates, the loss is likely to widen from ₹5.8 billion in Q3 to ₹7.8 billion in Q4, driven by a sharp increase in the number of dark stores and heightened competitive intensity.

While losses are expected to decline meaningfully starting in Q1FY26, the high base of fixed costs implies that the path to achieving break-even at the adjusted EBITDA level may take some time.

Meanwhile, another domestic brokerage, Ambit Capital, has initiated coverage on Swiggy with a 'Sell' rating and a target price of ₹310 apiece. Ambit noted that while Swiggy was once a first mover, it now plays the role of a challenger—ranked second in food delivery and third in quick commerce. 

The brokerage estimates that Swiggy trails Zomato in profitability by 6–12 quarters. It expects food delivery market share to stabilize at 42%, with adjusted EBITDA margins improving to 5% of average order value (AOV) by FY40, which is double the current level.

However, Ambit remains less optimistic on the quick commerce segment, citing limited catchment areas (restricted to the top 30–50 cities), overstated expectations around advertising-led take-rate expansion, and underappreciated risks related to prolonged competitive pressure.

Earlier, global brokerage firm BofA lowered its rating on Swiggy to 'Underperform' from an earlier 'Buy,' while the price target was also cut down to ₹325 per share from ₹420. Macquarie also remains cautious on Swiggy.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.