Shares of new-age internet companies are in focus after the lock-in period got expired for the pre-IPO investors. Ever since the lock-in expiry, investors have been diluting their stake in these counters.
On November 17, Softbank sold 29 million shares of Paytm through a block deal. Similarly, Lighthouse India Fund III sold three crore FSN E-Commerce Ventures (Nykaa) worth Rs 525.39 crore in a bulk deal, BSE data showed.
Also, according to some reports, Lighthouse is again likely to sell a stake worth Rs 320 crore in Nykaa, via a block deal.
Read more: Nykaa bulk deal: Lighthouse India Fund sells Rs 525 crore worth shares at Rs 175.13 apiece
The one-year lock-in period for Nykaa pre-IPO shareholders got expired on November 10, 2022, and the scrip also turned ex-bonus the same day.
Read more: Paytm, Nykaa shares on a rollercoaster ride! Where are they headed?
Shares of Zomato also took a beating after the company’s founder Mohit Gupta resigned from the company. It is said that the company is letting go of around 3 per cent of the workforce in the latest episode of layoffs. Various departments have been impacted by the layoffs.
Read more: Zomato layoffs: employees across departments fired, co-founder also quits
The lock-in period of Delhivery also ended on Monday. CA Swift Investments dumped half of its holding in Delhivery at an average price of Rs 330.02 apiece, NSE bulk deal data suggested.
In another bulk deal, Morgan Stanley Asia (Singapore) bought 48,54,607 (48.52 lakh) Delhivery shares at an average price of Rs 330 apiece.
“When the tide turns, the appetite for high growth unprofitable companies falls and investments go back to safe value stocks. If you talk to the significant startup and PE voices, they talk about funding winter approaching and continuing in 2023, and that there is a shift in private investors asking for profitability. This thought process will sync with the sync the listed markets also,” Divam Sharma, Founder at Green Portfolio told Business Today.
“We are seeing deferment in most of the approved DRHP’s (IPOs) of similar loss-making tech companies considering the macro environment challenges. Companies like Pharmeasy have dropped IPO plans, its shares in unlisted markets have fallen from 140 to 30 and still are not able to find any takers and have been finding it difficult to raise capital through rights issues,” he said.
“Key PE and anchors dumping the stocks of Paytm, and Nykaa at such discounted levels are also a concern. We believe these stocks will follow trends from Nasdaq. We still believe that maintaining high growth and profitability to justify the valuations will be tough for these companies going forward. Also, on the regulator side, we are seeing regulations around influencers, data protection etc which will keep on impacting these businesses,” Sharma said.
He further added that there are in fact many companies in the private markets in various tech-based businesses which are profitable and are available for secondary at very lucrative valuations.
“If you look at Paytm or Zomato, the companies have seen the exit of senior executives post them creating large value through the listing and many of them perusing entrepreneurial journey. There could be trading bounces, but investors should still stay away from these new age companies which are trying to juggle between growth and profitability in the near term,” he said.
Notably, the shares of Paytm, Nykaa, Delhivery and Zomato have cracked over 50 per cent from their all-time high.
Disclaimer: Recommendations given by the experts are their own. These do not represent the views of Business Today.