Shares of Indian online delivery platform Swiggy gave up some gains to close 2.5% higher on Friday, ahead of being dropped from MSCI’s indexes and amid overseas outflows.
The firm’s shares had risen as much as 5.61% and were up 3.5% before India’s stock closing auction, when funds that track global indexes make portfolio adjustments.
Swiggy likely saw an estimated $360 million in passive outflows on Friday, said Abhilash Pagaria, head of Nuvama Alternative & Quantitative Research.
“The event could absorb much of the technical selling overhang, easing a key near-term pressure,” he said.
Swiggy shares, which will not be part of MSCI’s Global Standard and Mid-cap indexes from Monday, slipped 1.6% this week as the firm was placed in the so-called red-flag list by National Securities Depository with foreign ownership rising close to a regulatory cap.
The cap on overseas investments was halved to 49.5% from 100% on Tuesday after shareholders voted in favour of a proposal that allows Swiggy to shift to an inventory model.
The tighter limit and MSCI deletion have raised concerns about outflows and liquidity-driven volatility in the shares.
Swiggy has fallen 28.5% so far this year, steeply underperforming the Nifty mid-cap 100 index, which has gained 4.3%.
Reuters
