Mixed Week For New-Age Tech Stocks Amid Bloodbath In Broader Market, Menhood Top Gainer This Week

In a tumultuous week for the broader Indian market, new-age tech stocks witnessed mixed investor sentiment. Eleven of the 28 stocks under Inc42’s coverage gained in a range of 0.15% to just a little under 13% this week. 

Jaipur-based D2C male grooming brand Menhood emerged as the top gainer this week. Shares of Menhood’s parent Macobs Technologies ended the week at INR 145, up 12.93% from last week.

Other gainers of the week included Paytm, PB Fintech, Go Digit, RateGain, among others. 

Meanwhile, 17 startups ended in the red this week, falling in a range of 0.88% to over 7%. Car marketplace CarTrade emerged as the biggest loser this week, with its shares tanking 7.36% to end the week at INR 907.75.

Delhivery, EaseMyTrip, Nykaa, Awfis, Ola Electric, and Zomato were among the other losers this week.

It is pertinent to note that the market was closed on October 2 on account of Gandhi Jayanti. 

Meanwhile, the week saw the four-week momentum in the broader market coming to a screeching halt. While Sensex fell 4.5% to end the week at 81,688.45, Nifty50 went down 4.4% to 25,014.60.

Escalating geopolitical tensions in the Middle East triggered a decline in the global markets this week over their impact on fuel prices. Besides, the stimulus measures announced by China led to global investors shifting their focus to the Chinese market from the Indian market.

Vinod Nair, head of research at Geojit Financial Services, said that the decline in the Indian market was broad based this week. He expects the market to be under pressure for some time. 

“The spike in oil prices due to the mounting tensions in the Middle East may add input cost inflation and thereby impact the earnings visibility of domestic companies. The market is likely to witness a consolidation phase as the expensive valuation and unfavourable macro situation may influence investors to adopt a sell-on-rally strategy,” he said. 

Meanwhile, Hrishikesh Yedve, AVP of technical and derivatives research at Asit C. Mehta Investment Interrmediates, said that the indices broke their key support base and are indicating fresh weakness, which may lead to further downward movement.

Meanwhile, 41 companies filed their IPO papers in September, the highest ever recorded in a single month, amid the bull run in the broader markets. 

In the startup context, coworking space provider DevX became the latest to file a draft red herring prospectus (DRHP). Its public issue will consist solely of a fresh issue of 2.47 Cr equity shares. 

Besides DevX, foodtech major Swiggy, which filed its updated DRHP with SEBI on September 26, got shareholders’ nod this week to increase the size of fresh issue in its IPO to INR 5,000 Cr from INR 3,750 Cr earlier.

Commenting on the IPO trends, Pantomath Financial Services Group’s founder Mahavir Lunawat said, “Increasing number of growth stage businesses shall hit the street. Moreover, we will have a trend of multinationals coming to tap the Indian capital market. Besides, several other market liquidity parameters, notably monthly mutual fund flow has doubled since last quarter and we are getting close to INR 40,000 Cr of money every month. This has fuelled capital market buoyancy phenomenally.”

With that said, let’s take a deeper look at the performance of the new-age tech stocks this week. 

The total market capitalisation of the 28 new-age tech stocks under Inc42’s coverage dipped to $80.85 Bn at the end of this week as against $81.69 Bn last week.

Honasa’s UAE Troubles

Shares of Mamaearth parent Honasa Consumers plunged 6.27% to end the week at INR 427.95. With this, its market cap also fell to $1.65 Bn. 

It is pertinent to note that the stock touched an all-time high at INR 546.50 on September 10. 

The primary reason behind the decline in the stock price this week was a ruling by a Dubai court in connection with the company’s dispute with its former UAE distributor RSM General Trading. 

Honasa said on Friday that a Dubai court upheld its order directing attachment of its assets. However, the court rejected the RSM General Trading’s demand to cancel the trading licence of Honasa’s subsidiary Honasa Consumer General Trading LLC. 

The company said that it will appeal against the Dubai court’s latest ruling. Honasa also said that the order will have no financial impact, adding that it is in the process of initiating contempt proceedings against RSM General Trading in the Delhi HC for failing to comply with the court’s previous ruling.  

Despite this, the stock ended over 4% lower on the BSE on Friday.

On Saturday, the company clarified that it does not own any asset in the UAE and its Dubai subsidiary has been exempted from the attachment order. 

CarTrade Continues To Fall 

In its third consecutive week of loss at the bourses, shares of CarTrade saw a big dip this week. The stock crashed 7.36% to end the week at INR 907.75. Besides, its market cap also fell to $510 Mn. 

During the week, Goldman Sachs Asset Management said that it increased its stake in the startup to 7.19% from 5.15% at the end of the June quarter. Goldman Sachs, along with its associated entities, acquired an additional 9.78 Lakh shares of CarTrade via open market transactions, it said in an exchange filing. 

In the previous week, Warburg Pincus exited the startup by divesting its entire 8.64% stake in the auto marketplace for INR 375.1 Cr. Most of the shares were picked up by Mirae Asset Mutual Fund, which bought 30.22 Lakh shares at INR 920 per share. 

It must be mentioned that shares of CarTrade gained 6.02% to touch a 52-week high at INR 1,034.50 on the BSE during the intraday trading on September 25. However, the stock has fallen about 12% from there. 

TAC Infosec Gains On The Back Of International Expansion

Shares of NSE Emerge-listed TAC Infosec ended the week at INR 723, up 10.40% from last week. Its market cap also jumped to $90.16 Mn. 

The startup made multiple acquisition announcements this week. In an exchange filing on September 30, the cybersecurity startup said it acquired US-based CyberSandia with an aim to enhance its regional presence and expand its global operations. CyberSandia holds an exclusive government contract to provide IT services to New Mexico, it said.

Last month, the startup had said that it would acquire CyberSandia for $25,000.

TAC Infosec also announced the acquisition of WOS, a wholly owned subsidiary of TAC Cyber Security Consultancy LLC, based in the UAE. The move is aimed at meeting the growing demand for advanced cybersecurity services in the Gulf Cooperation Council (GCC) region.

“Both developments are part of TAC Security’s consistent growth and focus on innovation in the cybersecurity space. Its ESOF (Enterprise Security in One Framework) platform continues to be adopted by enterprises and governments worldwide to combat evolving cyber threats, enabling the company to lead the way in comprehensive vulnerability management and cybersecurity solutions,” the startup said in a statement. 

The new UAE subsidiary will enable the company to diversify its client base and provide cybersecurity services to cross-border clients throughout the GCC, according to the statement.

Earlier, TAC Infosec said it acquired 590 new customers in the first quarter of FY25, of which 149 clients came from the US. Back then, it said it was looking to bolster its global expansion.