Food delivery platform Swiggy made its much awaited debut at a premium on stock exchanges on Wednesday but gave up some gains immediately after.

What Happened: Shares of Swiggy saw a favourable listing on the stock exchanges on Wednesday, debuting on the NSE and BSE at ₹420 and ₹412, respectively, representing a premium of about 8% over the IPO’s upper price band of ₹390. Ahead of the listing the IPO’s grey market premium stood flat at ₹0.

The much awaited IPO is expected to help the firm compete with Zomato, which listed in the bourses in 2021. These are the only two major players in the Indian food delivery industry.

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The issue, which opened on November 6, was valued at ₹11,327.43 crore. It comprised a fresh issue of 11.54 crore shares, amounting to ₹4,499.00 crore, and an offer for sale of 17.51 crore shares, aggregating to ₹6,828.43 crores.

Global brokerage Macquarie initiated coverage on the stock with an “underperform” rating and a target price of ₹325. It believed that the company, being India’s second-largest consumer app spanning food delivery, quick commerce and out-of-home services, as a clear growth trajectory to catch up with market leader Zomato.

However, it added that the quick-commerce segment currently lacks sustainable economic profitability and presents a more complex challenge.

Macquarie expects the company to achieve EBIT breakeven by FY28, driven by a projected 23% compound annual growth rate in core revenue.

Price Action: Swiggy lost 4.76% from its opening price of ₹420 to trade at ₹400 during early trade on Wednesday.

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