Shares of Indian food delivery company Zomato fell over 14% to record lows on Monday as the one-year share lock-in period for promoters, employees and other pre-IPO investors came to an end after the 2021 listing.
zomato share It debuted on stock exchanges on July 23, 2021, but the stock has since lost more than 60% of its value due to concerns about valuations and plummeting global growth stocks. Investors are also not comfortable with the acquisition of Blinkit (earlier known as Grofers), which Zomato recently acquired 4,447 crore which acts as a catalyst in the downward movement of the food delivery platform as Blinkit is a loss-making start-up.
“This selling pressure does not seem sustainable, as investors sitting on negative returns will hold the stock and may offload the shares at the IPO price. The stock is down nearly 75% from its all-time high price, primarily on concerns of a Blinkit acquisition and sell-off in global technology stocks, while on a year-over-year basis, it is down 65%. Investors with high risk appetite can consider this stock for investment, but it is not suitable for retail investors,” Choice Broking said.
new age glow technical stock is disappearing at a very fast rate. In the ongoing market correction due to hike in interest rates due to geopolitical crisis and inflation, the share prices of all-new-age fintech startups have come down significantly.
According to analysts, another reason for investors to be cautious is that recent global events have changed the mindset of investors to invest in traditional defensive stocks over new age growth stocks.
“Investors who are still into these fintech stocks or have made fresh entrants should wait for the market to stabilize before the price corrects itself or for fresh entry. Also do not recommend fresh entry,” said Mohit Nigam, Head – PMS, Hem Securities.
Zomato is scheduled to report its first quarter results on August 1. The company had registered a 75% jump in fourth quarter (Q4FY22) revenues, while Gross Order Value (GOV), the total value of all food delivery orders on its online. platform, up 77% from the year-ago quarter.
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