Amid bloodbath on the Dalal Street, the stocks of new age digital platforms — Zomato, Nykaa, Paytm — plunged sharply on Monday. The stocks touched there lowest level on January 24 since listing. PB Fintech, the parent company of Policybazaar and Paisabazaar, One97 Communications, the parent of Paytm, Car Trade, Fino Payment bank stocks also felt the hit on Monday with the shares touching all-time low.
The sudden drop in the new age business stocks can be attributed to the global trend where investors are not interested in non-profitable tech stocks. Analysing the trend, V K Vijayakumar, chief investment strategist at Geojit Financial Services said, “An important feature of the tech sell-off is that bulk of the selling is happening in non-profitable tech stocks. This trend is impacting stocks like Zomato and Paytm in India too.”
Stocks markets across the world remained under pressure in the last few session. Investors are keenly waiting for the US Federal Reserve Committee meeting scheduled this week. To handle the rising inflation, the US central bank may opt for sooner-than-expected policy rate hike measure, according to a poll by Reuters. Anticipating this aggressive move, the US bonds yields rose significantly. This has deemed the appeal of loss-making Indian tech stocks among investors.
Pointing out the other reasons impacting the domestic market, V K Vijayakumar said, “The trend in global stock markets has turned distinctly bearish. Last week S&P 500 and Nasdaq closed 8 per cent and 15 per cent below their all time highs. The sell-off in tech stocks has been brutal last week. European stocks too turned bearish. The heightened tensions in the Russia-Ukraine border is a major geopolitical concern. FIIs again turning big sellers is a major headwind. Investors have to move cautiously.”
What Zomato, Nyka, Paytm Investors Should Do
Zomato, the popular food delivery platform stocks dropped 20 per cent on Monday to hit all-time low of Rs 90.95. Paytm shares dropped 6 per cent while the shares of FSN e-commerce plunged 13 per cent while writing this article. The shares of PB Fintech Ltd slumped 11 per cent on Monday.
If you have invested in these new age tech stocks, here is what analysts recommend for you
“Those who hold Paytm shares should exit on bounce and wait for ideal levels to re-enter whereas fresh buyers are advised to take any position at current levels. One can look to Buy either at Rs 800 with stop loss Rs 677 for 2-year target of Rs 1,950 to Rs 2,000 or above Rs 1,100 maintaining stop loss at Rs 915 for same two-year target,” said Ravi Singhal, vice chairman, GCL Securities.
“Zomato is facing tough competition by Swiggy in many terms; it is mainly having a thinner metro restaurant network and density vs Swiggy. We recommend investors to maintain a ‘sell’ position in the stock,” said Ravi Singh, vice president and head of research at Share India Securities.
“Today we are suggesting retail investors not catch the falling knife at this point in time, we may see some more volatility as next week is going to be on budget i.e February 1 2022. Markets are down on the back of global clues and not-so-good results by companies in Q3FY22 as of now,” said Yash Gupta — equity research analyst, Angel One Ltd.
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