Shares of Swiggy dropped over 4 percent in early trade on December 11, erasing all of its previous day losses as investors rushed to book profits after the one-month lock-in period for anchor investors expired today.

Following the lock-in expiry, as many as 6.5 crore shares of Swiggy, or a 3 percent stake in the company, became eligible to trade, opening the doors for anchor investors to go ahead and offload 50 percent of their holdings in the stock if they wished to do so. The lock-in period for the remaining 50 percent of shares owned by anchor investors ends on February 9.

It must be noted that the end of a lock-in period does not mean that all the shares will be sold, but they only become eligible to be traded.

Meanwhile, the stock has also surged 25 percent in less than a month since its market debut, giving investors plenty room to take home partial profits. At 09.21 am, shares of Swiggy were trading at Rs 523.95 on the NSE. Despite the fall in today's session though, the stock still boasts of 21 percent gains since its listing.

The market debut of Swiggy last month has brought the quick commerce segment into the limelight, with CLSA predicting that the Indian quick commerce sector could expand sixfold between FY24 and FY27. Not just that, CLSA also believes that this sprawling market offers plenty of room for multiple players to not only co-exist but thrive.

Accordingly, the several investors who missed the bus when it came to Zomato, rushed to become a part of Swiggy's uptrend, given its cheaper valuations and scope for growth as it aims to catch up with the industry leader.

In the previous session, shares of Swiggy had risen over a percent after brokerage firm CLSA  initiated coverage on the stock with a bullish 'outperform' call, seeing a target price of Rs 708 per share, indicating a whopping 32 percent upside from current levels.

"Swiggy has significant growth potential as it addresses a very large TAM for food delivery and quick commerce," noted CLSA. The brokerage added that it believes Swiggy's execution can improve by accelerating growth and improving profitability.

The food delivery player is likely to lag number one player Zomato, but CLSA believes this gap is visible in Swiggy's valuations and price.

Brokerages highlighted that Swiggy has managed to halt the widening gap with its larger competitor, Zomato, hinting at a potentially stronger competitive footing in the food delivery space.

In quick commerce, Swiggy’s Instamart is vying against Zomato's Blinkit and other players like Zepto, emphasizing rapid delivery services. To bolster its position, Swiggy has been actively expanding its dark store network to strengthen its quick commerce operations.