Swiggy Shares Fall 7% as Shareholder Lock-in Period Ends

On Tuesday, May 13, Swiggy Ltd. experienced a significant drop in its share price, which fell by as much as 7%. By 9:46 AM, the share price of Swiggy was trading below the ₹300 mark, marking a noticeable decline. This fall in share price was attributed to the expiration of the company’s shareholder lock-in period, which allowed a substantial number of shares to become eligible for trading.

Shareholder Lock-in Period Comes to an End

According to a report by Nuvama Alternative & Quantitative Research, the end of the lock-in period means that 189.8 crore shares of Swiggy, accounting for 85% of its total outstanding equity, are now eligible for trade. This marks a pivotal moment for the company, as these shares, worth an estimated $738 million at current market prices, are now available for potential sale in the open market.

Impact on the Market and Share Trading

It’s important to note that while these shares are now eligible for trading, this doesn’t necessarily mean that all will be sold immediately. The expiry of the lock-in period simply allows shareholders to trade their shares, but it doesn’t imply that they will all enter the market at once. The decision to sell or hold shares remains with the shareholders.

Financial Performance Amid the Lock-in Expiry

Swiggy recently reported its financial results for the March quarter. The company’s net loss widened compared to the same period last year, largely due to the challenges faced by its quick-commerce segment, Instamart. Despite this, Swiggy’s Food Delivery Business showed signs of resilience, with a better-than-expected Gross Order Value growth when compared to its peer, Eternal. Additionally, the company’s margins also saw a positive expansion during the period.

Read More: Swiggy Share Price in Focus: Revenue Up, Net Loss Widens in Q4FY25. 

Conclusion

The end of Swiggy’s shareholder lock-in period has triggered a temporary fall in its share price as a significant volume of shares becomes eligible for trading. While this doesn’t guarantee that these shares will flood the market, it does open up the possibility for increased liquidity. Swiggy’s performance in the face of its quick-commerce challenges, alongside the positive growth in its Food Delivery Business, provides a mixed yet intriguing outlook for the company’s future in the market.

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