The S&P BSE IPO index plunged 8 per cent as the recently listed stocks were hammered on Monday amid a heavy sell-off in the markets. The stock markets were under selling pressure for the fifth straight trading session owing to weak global cues on rising concerns about inflationary pressures, surging coronavirus cases and prospects of interest rate hikes.
Zomato, FSN E-Commerce Ventures (Nykaa), C E Info Systems (MapmyIndia) and PB Fintech, the parent company of Policybazaar were down up to 20 per cent in intra-day trade so far. All these stocks hit their respective all-time lows since their listing on the stock market.
Latent View Analytics, Go Fashion (India), Chemplast Sanmar, Macrotech Developers (Lodha), CMS Info Systems, Sona BLW Precision Forgings and Devyani International slipped between 8 per cent and 10 per cent on the BSE.
At 02:03 pm; the S&P BSE IPO index, was the top loser among indices, down as much as 8 per cent, as compared to 2.8 per cent decline in the S&P BSE Sensex. The S&P BSE Smallcap and S&P BSE Midcap indies were down 5 per cent and 4 per cent, respectively.
Among individual stocks, shares of Zomato continued to wilt under selling pressure, as they slipped to a new low of Rs 91.70, down 19 per cent in intra-day trade on back of heavy volumes. The stock of food delivery giant had plunged 27 per cent in past two trading days. The trading volume at the counter jumped over 8-fold with a combined around 160 million equity shares changing hands on the NSE and BSE.
With the last two day’s decline, the stock price of Zomato tanked 45 per cent from its 52-week high of Rs 169.10 hit on November 16, 2021. Zomato had raised Rs 9,375 crore through initial public offer (IPO) by issuing shares at price of Rs 76 per share.
Zomato is the leader in India’s nascent online food delivery business with a massive growth playfield. In July-September quarter (Q2FY22), the company’s adjusted Ebitda loss increased to Rs 310 crore as compared to Rs 170 crore in previous quarter (Q1FY22) and Rs 70 crore in Q2FY21 last year. Adjusted revenue grew 22.6 per cent quarter-on-quarter at Rs 1,420 crore.
JP Morgan in its report dated December 8, 2021 said that its data-driven analysis of 32K restaurants across leading Food Techs across India’s largest food delivery cities suggests Zomato’s network density, exclusivity and unit economics are weaker than Swiggy in the top 3 cities, and overall GMV/economics dependent on tail cities.
Zomato has a thinner Metro restaurant network and density vs. Swiggy. There is higher restaurant exclusivity than expected with Swiggy leading at 56 per cent, and Zomato at 45 per cent, supporting higher take-rates, the foreign brokerage firm said. It reiterates “underweight” on Zomato given likelihood of disappointment in profitability and unit economics and expensive valuations.
Shares of FSN E-Commerce Ventures (Nykaa) hit a new low of Rs 1,715, down 14 per cent, falling as much as 16 per cent in past two trading sessions on the BSE. The stock of fashion and cosmetics online retailer has dropped below its previous low of Rs 1,886 touched on December 20, 2021.
With the past two days decline, the stock price of Nykaa has shed 33 per cent from its record high of Rs 2,574 touched on November 26, 2021. The company issued shares at price of Rs 1,125 per share in its initial public offer (IPO). The stock had made a stock market debut on November 10, 2021.