You may remember that a number of prominent Indian tech companies had opted to go public via IPOs last year. Some of the more prominent names to have gone public last year are food delivery giant Zoamto, which had a spectacular IPO last July, and fashion e-commerce startup Nykaa (which made its debut in November). PolicyBazaar and Paytm are some other names that went public last year as well.
While their IPOs gave handsome returns to their investors on their listing (apart from Paytm’s, which was rather disappointing), their shares are now tumbling. In fact, Zomato’s shares dropped by 18% on the Bombay Stock Exchange to ₹92 apiece. This is its lowest since its IPO. However, it is still up by more than 30% from its IPO issue price of ₹76.
Coming to Paytm, its shares dropped by 4% to ₹924 apiece during early trade. Zomato lost about 30% of its value (since its IPO) last week and saw its market cap drop below ₹80,000 crores. Similarly, Paytm lost double of that (almost 60% of its value) when compared to its issue price – ₹2,150. Paytm’s stock has anyways been under pressure amid continued mark-downs, no long term signs of making profits and continued sense of business model distraction within the company.
Stocks of other new-age firms fared no better and continued to tumble as the sell-off in the global stock markets continue to intensify. Nykaa’s shares tumbled by 11% to ₹1776.50, and the company lost 30% of its value from its record high of ₹2,574 (back in November). PolicyBazaar parent PB Fintech saw its shares drop by nearly 5% to ₹825.70. The company lost 45% of its value from peak levels.
Things do not seem to be changing anytime soon as the sell-off in the global markets continues and valuations continue to rise. The technology-focussed NASDAQ index closed 15% below its peak levels last week, and this has resulted in panic among technology investors around the world. Add to that the speculation of higher interest rates in the US, and you get an idea as to why the panic is gaining traction.
As mostly non-profitable tech stocks are being sold off, this is affecting the stocks of startups such as Zomato and Paytm. Both of them, along with Nykaa and PB Fintech, have hit their new lows on Monday. Other listed stocks such as RateGain Travel Technologies, Latent View Analytics, Sona Comstar, MapMyIndia, Sapphire Foods India, Rolex Rings, GR Infraprojects, and Metro Brands have dropped by 5-9% each as well.