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Business News/ Markets / Stock Markets/  Zomato shares hit record low, plunge below IPO issue price. Should you accumulate?

Shares of Zomato continued to extend decline as it plummeted over 6% to an all-time low level of 75 apiece on the BSE in Tuesday's deals, falling below the IPO issue price of 76. The stock is down about 18% in the last five trading sessions whereas it has declined over 41% in a month, after the recent global selloff in new-age tech stocks.

"Weakness in Zomato shares may further continue and it may go around 65 to 70 levels. The stock is expected to pick up with unfolding of unlock activities. So, those who have long term view are advised to start accumulating around 65 to 70 and hold it for next 2-3 years. Once, it comes above 100, we can expect sharp upside bounce in the scrip after this breakout," said Ravi Singhal, Vice Chairman at GCL Securities said. He added that fresh buyers can also buy Zomato shares in this range.

"Zomato shares are still looking weak on chart pattern but it has strong support at 70 levels. One can buy this scrip at around 70, maintaining stop loss at 58 with short term target of 60," said Anuj Gupta, Vice President at IIFL Securities.

Last week, Zomato's Q3 loss narrowed, helped by a one-time gain, while revenue jumped due to increased demand for restaurant meals. The food delivery platform reported a consolidated net loss of 67 crore, boosted by a one-time gain of 315.8 crore from the sale of stake in sports platform Fitso. 

The company's consolidated revenue from operations during October-December 2021 stood at 1,112 crore as against 609 crore in the year-ago period. Its gross order value (GOV) grew 84.5% YoY and 1.7% QoQ to 5,500 crore.

The food-delivery platform had made its stock market debut in July 2021. The initial public offering (IPO) with a price band of 72-76 had opened from July 14 to July 16, 2021.

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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Updated: 15 Feb 2022, 01:39 PM IST
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