Mixed Week For New-Age Tech Stocks Amid Market Volatility, Zomato Emerges As Biggest Loser

Indian new-age tech stocks witnessed a mixed week on the bourses amid volatility in the broader domestic equity market.

Out of the 28 stocks under Inc42’s coverage, 14 gained during the week in a range of 0.1% to 16%. Continuing its rally, NSE Emerge-listed TAC Infosec was the top gainer this week.

TAC’s shares jumped almost 16% during the week as it announced a new partnership with Google to assist developers and organisations in meeting the tech giant’s mobile application security standards.

CarTrade was the second-biggest gainer this week, with its shares rallying 10.9% on the BSE. It was followed by Awfis, which gained almost 7%, and ixigo, which went up about 6.8%.

Zaggle, Yudiz, PB Fintech, and DroneAcharya were among the other gainers this week.

Meanwhile, 14 stocks declined during the week, with Zomato being the biggest loser. Shares of Zomato nosedived over 7%, while EasyMyTrip fell 6.4%. ideaForge fell 5.1% on the BSE.

Nykaa, Ola Electric, Delhivery, Yatra, Menhood, Mamaearth, Tracxn, TBO Tek, Go Digit, RateGain, ideaForge, and FirstCry were the other losers this week, falling in a range of 0.1% to 4%.

Amid geopolitical uncertainties and lack of strong domestic cues, benchmark indices Sensex and Nifty fell 0.19% and 0.44% this week. However, both the indices ended the last session of the week in green, with Sensex closing at 81,224.75 and Nifty at 24,863.4.

The IT indices were negatively impacted after Infosys provided a subdued outlook for its Q2 earnings.

Vinod Nair, head of research at Geojit Financial Services, said, “A sustained selling pressure from FPIs, muted Q2 earnings expectations, and elevated valuations acted as a headwind for the market. Insipid demand and volatility in input prices are the hindrance in earnings during the quarter.” 

However, he said that the long-term outlook for the domestic market remains robust due to strong economic growth forecasts and expected pickup in capital expenditure. “We expect the market to be range-bound in the short term with mixed bias, while investors should turn more sector- and stock-specific in such a time,” Nair added.

Prashanth Tapse, senior VP (research) at Mehta Equities, also said that geopolitical tensions, coupled with persistent FII outflows from the domestic markets, led to caution in the market.

According to Siddhartha Khemka, head of research, wealth management at Motilal Oswal, consolidation is expected to continue due to mixed global cues and lack of domestic triggers. 

Amid the Q2 earnings season, stock-specific actions are expected.

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

The 28 new-age tech stocks under Inc42’s coverage ended the week with a total market capitalisation of $77.56 Bn as against $81.48 Bn last week.

Zomato Slumps Amid Fundraise Plans

Shares of foodtech major Zomato nosedived a significant 7.2% to end the week at INR 257.4 on the BSE. 

The decline came amid the company’s announcement to raise funds plans via qualified institutional placement (QIP). 

In The News For:

• As per media reports, Zomato is planning to raise INR 8,500 Cr (about $1 Bn) via QIP. The startup did not disclose the quantum of the fundraise in its exchange filing. Its board will meet on October 22, to consider and approve the proposal.
• Besides, Zomato’s independent director Gunjan Soni stepped down from the company’s board last week citing “increased professional commitments”.
• As per a media report, Zomato is also looking to modify and relaunch its logistics business ‘Xtreme’ after suspending it earlier this year due to poor demand.

While Zomato’s shares gained in the first trading session of the week, they saw a sharp decline in the next four consecutive sessions.

Its shares have gained 108% year to date.

EaseMyTrip At Almost A Three-Year Low

After a sharp slump in its share price at the end of last month, EaseMyTrip is struggling to get back on track. The stock fell in all five trading sessions this week.

Shares of EaseMyTrip fell 6.4% to end the week at INR 32.01 on the BSE. The shares last traded at this level in December 2021.

While the stock has been under pressure almost throughout the year, it fell sharply after cofounder and CEO Nishant Pitti offloaded 24.65 Cr shares of the company. Amid this, the traveltech major approved a 1:1 bonus share issue this week.

The company said that it would be issuing 177.2 Cr shares at a face value of INR 1 each. It would require INR 177.2 Cr for implementing the bonus share issue.

The company’s shares have declined 20.6% year to date.

Nazara’s New Acquisition

Nazara obtained the shareholders’ approval this week to acquire a significant stake in Moonshine Technology, the parent firm of online poker platform Pokerbaazi.

As part of the gaming major’s ongoing acquisition spree, Nazara entered into a definitive agreement to acquire a 47.7% stake in Moonshine Technology for INR 831.5 Cr through a secondary transaction last month.

The company said it received the shareholders’ nod for the deal at its extraordinary general meeting held on October 12.

Shares of Nazara declined in the middle of this week but recovered later to end the week in the green. Overall, Nazara gained 0.33%, ending at INR 926.8 on the BSE.

Currently, its shares are trading over 8% higher year to date.