A day after the stock plunged nearly 12 per cent as the lock-in period for pre-IPO shareholders fell, Zomato shares tumbled on the BSE for the second consecutive day on Tuesday. (promoters, employees and other institutions) were abolished.
Jefferies says that the night is darkest before dawn; maintains buy on stock
“Concerns about Fed tightening and investor focus on cash flow are weighing on internet names including food tech globally. Zomato, which was not liked by the time of listing last year, had underperformed YTD. Blinkit The acquisition paves the way for profitability and despite management’s guidance on break-even in food delivery, investors are not giving many benefits of the doubt,” Jefferies said in a note.
The global brokerage feels that this is a great case for LT (Long Term) investors to buy Zomato shares and have a target price of Rs 100 on the stock.
“The Zomato management has also accelerated its journey towards better unit economics and is now eyeing a break-even in the food delivery business in the near future. Adjusted Ebitda Deficit for 4QFY22
Unlike in the past when Zomato intended to invest in multiple businesses, some strategic (tracking an eventual merger) and others as financial investments, the company now intends to conserve cash. The brokerage said that the company does not plan to provide any resources for minority investments, existing or now.
The one-year lock-in period for about 613 crore shares or 78 per cent of Zomato’s shares ended on July 23. Market analysts were expecting selling pressure in the stocks this week. The public issue of Zomato was listed on BSE and NSE on 23 July 2021.
As per the rules laid down by market regulator SEBI, who previously held shares of a company IPO You cannot sell your shares for a period of one year after listing.
The food delivery company made a grand entry on 23rd July last year at Dalal Street. It issued shares worth Rs 76 in IPO but it soon became a multibagger, hitting a lifetime high of Rs 169 on BSE. However, the journey has slowed since then as investor enthusiasm has waned. Analysts and investors have started questioning the company’s profitability plan, while Zomato has little to show.
read all breaking news And today’s fresh news Here