A clutch of new age technology companies has lost nearly Rs 2.5 trillion (roughly $20 billion) in market capitalisation since listing on the exchanges. Shareholders have been disappointed by either poor performance or unwieldy acquisitions. In some instances, the sale of stakes by investors post the expiry of the lock-in period, has dragged the stock down.
Although Paytm reported smaller losses of Rs 571 crore sequentially in the September quarter and a revenue growth of 14% to Rs 1,914, the arrival of new competition has also prompted analysts to become more cautious. For example, analysts at Macquarie believe that Jio Financial Services “can pose a significant growth and market-share risk” for players such as Paytm and Bajaj Finance. Paytm has launched a buyback of shares at Rs 810 apiece, about 60% lower than its IPO price, but that has not enthused shareholders.
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The stock is trading at Rs 476.40, less than a fourth of its IPO price of Rs 2,150.
In mid-October, a cautionary outlook from Delhivery
Nykaa’s performance in Q2FY23 was a shade below expectations since the net profits came in at just Rs 5.5 crore, due to the fallout of the inflationary pressures. Analysts at Jefferies pointed out that despite the fashion business being at an early stage, a low single digit q-o-q growth is a disappointment. “It reflects management focus on measured growth rather than adopting an aggressive stance of chasing growth at any cost,” they observed.
Several investors sold their holdings post the expiry of the lock-in period, a factor that weighed on the stock. The company attempted to reward investors with a bonus issue. However, the move attracted criticism since the record date of November 11 coincided with the date of the expiry of the lock-in of November 10.
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In case of Zomato, the Street is anxious that the Blinkit acquisition will pull down the company’s performance. Analysts at Jefferies wrote recently that scepticism on quick commerce was high “given no proof of concept yet in any large market in the world”. While many of the key metrics registered improvements, the food delivery player reported a larger net loss of Rs 301.6 crore for the September quarter compared to Rs 262.5 crore in the June quarter. Worryingly, the company has laid off 3% of its workforce.
Investors have also been miffed with CarTrade Tech