New Delhi: Shares of new-age food aggregator Zomato fell thick and sharp on Monday morning as the mandatory one-year lock-in period for promoters, shareholders and others ended.
Lock-in period refers to the period for which the investment cannot be sold or redeemed.
At 11.11 am, the shares of the listed company were trading at Rs 47.45, down 11.6 per cent from the previous close. Its intraday low was Rs 46.
Listed on July 23, 2021, the food aggregator’s initial public offering was a success as it was subscribed 38.25 times. It started off well with a premium of 53 per cent. Currently, the share price of Zomato, however, is up almost 70 per cent from its peak of Rs 169.
Even though the company posted a good profit from its listing on the stock exchanges in July last year, it could not make any further gains.
“Zomato Ltd has seen a significant underperformance since its listing and has declined 71 per cent from its all-time high price. Puneet Patni, Equity Research Analyst, Swastika Investmart, said investors have left the company after the start of a cycle of rate hikes by central banks globally and heavy selling in the tech sector.
Moreover, it will take significant time for the company to show profitability and the current market sentiment is penalizing startups that are growing without showing profits.
“Therefore, we are against Zomato Limited despite the strong position and current improvement in the online food service platform,” Patni said.
Recently, the board of directors of food aggregator company Zomato approved a proposal to acquire cash-strapped quick commerce company Blinkit for Rs 4,447 crore. Blinkit was formerly known as Grofers. It believes that the acquisition will help increase the utilization of Zomato’s hyperlocal delivery fleet and reduce the cost of delivery.
Like Zomato, many others have also seen substantial gains on their exchange debut over the past year, but the latter underperformed and fell sharply from their all-time highs.
Analysts believed these companies lacked systematic direction and well-planned focus, while others attributed the slowdown to extremely high valuations. -any
This report is automatically generated from ANI news service. ThePrint assumes no responsibility for its contents.
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