Just as journalists, interns, 9-to5ers and day traders were all about to place their breakfast orders for the morning, Food Delivery startup Zomato saw its share price dropping by 14% in the early hours of trading Monday. The scrip hit an all time low of ₹46.6/share at 9:40 AM in the morning, eventually showing meagre signs of recovery to settle at ₹47.45.

Market experts had predicted this downfall a few days ago, as the one year lock-in period for promoters, employees and shareholders with a sizeable stake, who purchased the stock before the IPO, ended on July 23rd 2022. For companies like Zomato, which do not have identifiable promoters, SEBI has put in place the provision for a lock-in period.

With this development, Zomato’s market capitalisation has dropped down to $4.6 Bn, considerably below the firm’s last private equity valuation of $5.5 Bn. Ever since Zomato had a blockbuster opening day, with the stock trading at about 50% premium from its launch price of ₹76/share at ₹115/share, it has seen a steady decline. Addressing the matter, CEO Deepinder Goyal told company employees in January “This is the thing about stock markets and public companies – valuations can swing massively without any change in the fundamentals of the business depending on macro-economic factors like inflation, interest rates etc … we had no control on our valuation going up from $8 billion in the IPO to $17 billion at our peak, and vice versa

Zomato’s acquisition of the cash burning quick commerce grocery delivery startup Blinkit, a move made to expand into grocery delivery, also lead to a fall in the company’s stock price, as the company wiped off $1 Bn in market cap within two days. Not only has the move made no business sense for most investors, the personal involvement of Zomato founders within Blinkit has not helped the matter either. Goyal had a personal stake in Blinkit even before acquisition, while his other co founder is married to one of Blinkit’s founders.

According to data from the National Stock Exchange (NSE), 4.81 crore shares, adding up to ₹234.75 Crore, had been traded as of 9:40 AM. The Bombay Stock Exchange (BSE) also saw 60.86 lakh shares worth ₹29.74 crore on the trading block.

Stock market enthusiasts are expected to have an unbatting eye on the actions of shareholders  like Uber and Delivery Hero. These companies have been victims of the global slowdown themselves, and might just be keen to cash out from their positions in Zomato.