A handful of 2021 and 2022 listings have lost more than half of their market capitalisations amid the ongoing volatility in the market. This is against a 4 per cent fall in the BSE benchmark Sensex from its October 2021 high of 59,959.85.
Market watchers said the sky-high valuation played spoilsport for some of the listed companies. Investors with a high-risk appetite can consider some of these names post the steep fall, analysts said.
Fall from highs
Shares of PB Fintech, the operator of Policy Bazaar, have cracked 73 per cent so far from their all-time high level of Rs 1,470, hit on November 17, 2021. Earlier, the fintech got listed on bourses on November 15, 2021 at Rs 1,150 against the issue price of Rs 980, registering a gain of 17.35 per cent.
One97 Communications (Paytm), Zomato, FSN E-Commerce Ventures (Nykaa) and Delhivery have also lost 67 per cent, 63 per cent, 62 per cent and 50 per cent, respectively, from their respective all-time high levels.
Among these companies, Nykaa and Paytm will announce their financial results for the quarter ended September 30 on November 1 and November 7, respectively.
Earlier, Nykaa reported a 33.4 per cent growth in consolidated net profit at Rs 4.55 crore for the first quarter ended June 30, 2022. It had posted a profit of Rs 3.41 crore in the year-ago period.
Global brokerage Nomura gave a ‘Buy’ rating to Nykaa in October with a target price of Rs 1,365.
“Nykaa has a strong moat, led by much higher scale, exclusive brand tie-ups, BPC-focused app, omnichannel and a strong influencer network. Thus, we expect it to maintain its competitive edge and drive around 29 per cent revenue CAGR over FY22-25,” Nomura said.
On the other hand, Paytm’s net loss widened to Rs 644.4 crore in the June quarter of the current fiscal against a loss of Rs 380.2 crore in the corresponding quarter of the last fiscal year.
The pre-IPO lock-in period for Paytm, Nykaa and PB Fintech will expire in November 2022. There are expectations that the expiry of the lock-in period will also create extra supply for these counters.
Kotak institutional recently upgraded Delhivery to ‘Add’ from ‘Reduce’ with a fair price of Rs 415. Shares of the company traded at Rs 344 in Monday’s trade.
Strategy
Kranthi Bathini, Equity Strategist, WealthMills Securities said, “Some of the new-age companies have a strong business model. However, the way they came up with IPO had astronomical valuations. This is one reason for the fall. Going ahead, investors with a high-risk appetite can consider these shares. Market participants should also keep an eye on forthcoming quarterly results.”
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