Invested in Zomato, Paytm, Nykaa shares? What to do as they hit all-time lows
Zomato shares fell below the issue price of ₹76 apiece in previous session whereas Paytm stock has been trading below its IPO price since listing
PremiumMost of the newly listed new age businesses stocks like Zomato, Paytm, Nykaa have fallen sharply from their 52 weeks high as well as from their listing or IPO issue price. Shares of food-tech platform Zomato fell below the issue price of ₹76 apiece on Tuesday whereas Paytm stock has been trading below its IPO price since its dismal listing.
“We know that they come out with very expensive valuations amid euphoria in the market and only a few of them will survive, where Zomato and Star health are looking lucrative at current levels and they have the potential to create wealth for the investors in the long run while Nykaa is another profitable company that can be part of investors' portfolio. If we talk about Paytm, then there is still no clarity about their business outlook and timing of profitability," said Santosh Meena, Head of Research, Swastika Investmart Ltd.
There is a risk-off situation across the globe amid fear of tightening by the US Fed where the trend shows a sharp sell-off in growth stocks especially loss-making new age companies that came out with unrealistic valuations amid euphoria in the market, as per analysts.
"Recently listed new age business saw a lot of selling pressure, which was largely driven by macro factors and global volatility followed by weaker GOV seen in Zomato Q3 earnings. Considering the smoky earning outlook for Q4 earning we have a neutral outlook for the short term, while any improvements in the global market scenario, we could see a good trading zone between ₹80-92 in the near term, hence risk seeking traders can consider buying at current levels," said Prashanth Tapse, Vice President (Research), Mehta Equities Ltd.
Similarly, Star Health shares have fallen over 14% in a month, trading well below its issue and listing price.
"Star Health IPO was aggressively priced. The company faced some setbacks in the pandemic with higher one-time claims as well as intense competition. Investors should wait for the company to turn back into quarterly profits before entering the stock. The valuations still look expensive considering Price to Book Value when compared to peers," said Divam Sharma, Founder at Green Portfolio, SEBI Registered Portfolio Management Service Provider.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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