Shares of food delivery provider Zomato are trading below Rs 50 today, leaving investors worried about the outlook of the stock. The shares of Zomato have crashed 61.33 per cent since their listing on July 23, 2021. Zomato was one of the new-age companies, among the likes of Paytm, Nykaa, which listed in the stock market last year. Despite the buzz around these stocks, there were those who were sceptical. And, one of them was the ‘Warren Buffett of India’ – Mr Rakesh Jhunjhunwala.
He had seen it coming: the current state of Zomato stock. At the India Today Conclave last year, Jhujhunwala had expressed concerns over the valuation of the newly listed companies including Zomato.
The big bull had warned investors on the future of the Zomato stock. He had said, “If I say today that don’t buy Zomato share, people will call me a fool”.
ALSO READ: Zomato shares touch new low as lock-in period ends
“We will see after five years,” Jhujhunwala said referring to the exuberance surrounding the stock.┬а Unfortunately for Zomato, Jhunjhunwala’s prediction has not just come true but also at a faster pace than he had anticipated. ┬а
┬а“Time will come when excess in the market will correct because excesses in the markets are pro to correction,” the market guru had said. ┬а
Another ace investor Shankar Sharma on July 26, 2022 said the stock had erred by listing at a high valuation. In a tweet, Sharma said, “Zomato stock reminds me of what Amitabh Bachchan said in Deewar on hearing news of dad’s death: ‘Mar to woh bees saal pehle gaya tha. Aaj to sirf ussey jalaya ja raha hai’. It was game over on listing itself.”
Zomato, which made a stellar debut on bourses last year, hit its 52-week low of Rs 40.55 on Wednesday. ┬а
ALSO READ: Over 130% upside! Why Jefferies sees Zomato at Rs 100 in 12 months
The stock saw a huge drop of 20 per cent on July 25 and July 26 as one-year lock-in period for promoters, employees and other investors ended following its July 23 market debut last year. Zomato shares had listed at a premium of over 52 per cent to the IPO issue price. Shares of Zomato had opened at Rs 116, and 52.63 per cent higher on NSE against the issue price of Rs 76.
On BSE, the food delivery firm made its debut at Rs 115, 51.31 per cent higher to the issue price. ┬а
The stock rose further to its 52-week high of Rs 169.10 on November 16, 2021. ┬а
However, the stock has lost 73 per cent from its record high till date. In the current trading session, Zomato stock was trading at Rs 45.45, up 3.41 percent against the previous close of Rs 43.95 in the afternoon session today. The stock opened 2.16 per cent higher at Rs 44.90 today. ┬а
Total 75.13 lakh shares of the firm changed hands amounting to a turnover of Rs 33.50 crore on BSE. Market cap of the firm rose to Rs 35,982 crore.
