New-Age Tech Stocks Bleed Amid Broader Market Decline, FirstCry Biggest Loser This Week

After last week’s rally, the Indian equity market came under pressure this week due to rising geopolitical tensions and mixed global cues. In line with this, a majority of new-age tech stocks ended in the red this week. 

Twenty four out of the 33 new-age tech stocks under Inc42’s coverage declined in a range of 0.19% to slightly under 9% this week. Meanwhile, nine new-age tech companies gained in a range of 0.61% to 9.33%. 

As a result, the cumulative market cap of these companies declined by about $4 Bn to $87.32 Bn at the end of the week from $91.07 Bn a week ago. 

After rallying the most last week, FirstCry emerged as the biggest loser this week. Its shares slumped 8.88% to end at INR 378.35. With this, the company’s shares have nearly dropped 41% year to date. 

MobiKwik, Eternal, Swiggy, Awfis, and PB Fintech were among the losers this week. 

In the list of losers, shares of MapmyIndia declined 7.27% to end the week at INR 1,765.30. During the week, IPO-bound PhonePe offloaded about 5% stake, or 27.2 Lakh shares, in MaymyIndia via open market transactions for INR 486 Cr.

Notably, the last couple of weeks saw a number of major stake sales in new-age tech companies. While such deals took place in BlackBuck and Eternal in the past week, bulk deals for shares of Fino Payments Bank, MapmyIndia, MobiKwik and Nazara Technologies materialised this week. 

Despite this, shares of Fino Payments Bank gained 6.41% to end the week at INR 283.15 and Nazara zoomed 7.09% to close at INR 1,327.85.

Meanwhile, ixigo emerged as the top-gainer this week, with its shares rising 9.33% to end the week at INR 186.90.

Other gainers this week included Yudiz, CarTrade, Ather Energy, IndiaMART, BlackBuck and Zaggle. 

Amid all these, ArisInfra filed its RHP earlier this week for an INR 500 Cr IPO. The B2B ecommerce company’s IPO, which will consist solely of a fresh issue, will open on June 18 and close on June 20. 

Now, let’s take a look at the performance of the broader market this week. 

Geopolitical Tensions Hit Sentiments 

While Sensex lost 1.3% to end the week at 81,118.60, Nifty 50 declined 1.1% to close at 24,718.60. The bearish sentiment in the market came amid the Israel-Iran tensions, the resultant increase in oil prices, and more. 

“The Indian equity market witnessed heightened volatility this week, ultimately closing in the red. Early optimism, driven by progress in US-China trade negotiations, was overshadowed by escalating geopolitical tensions after Israel launched a strike on Iran’s nuclear facilities. This development sparked a global risk-off sentiment, leading to a rally in safe-haven assets such as gold and US bonds,” said Vinod Nair, head of research at Geojit Investments.

Ajit Mishra, SVP of research at Religare Broking, noted that Nifty 50 has now re-entered its consolidation range, and a decisive move beyond the 24,400–25,200 zone will be required to establish the next directional trend. 

“In the event of a breakdown, the 24,000 level is expected to act as a crucial support, whereas a breakout above 25,200 could trigger a sustained rally toward the 25,600 mark,” he added. 

Looking ahead, investors are expected to remain cautious amid high valuations and geopolitical risks. All eyes will now be on the US Fed meeting next week, where interest rates are likely to remain unchanged.

Now, let’s take a detailed look at the stock performance of Nazara and Paytm this week.

Big Developments At Nazara

With over 7% increase in its share prices, gaming major Nazara’s market cap rose to $1.35 Bn. 

The week was full of new developments for the company. During the week, Nazara completed the acquisition of UK-based Curve Games for INR 247 Cr, shortly after completing the buyout of Smaaash Entertainment. 

Nazar MD and CEO Nitish Mittersain said that the acquisition of Curve Games would help the company build its core gaming portfolio and expand into global PC and console markets.

Meanwhile, a major shift in the cap table of Nazara is afoot. The company will soon see an open offer materialise which will see Axana Estates LLP, Plutus Wealth Management LLP and Junomoneta Finsol buy up to 2.4 Cr of its shares at INR 990 apiece, translating to INR 2,384.2 Cr. The acquiring entities are largely controlled by Arpit Khandelwal, CaratLane founder Mithun Sacheti and his brother Siddharth Sacheti.

Meanwhile, late investor Rakesh Jhunjhunwala’s estate completely exited Nazara this week, dumping the entire shareholding of 10.8% in the company over the course of the past two weeks. 

Paytm Slumps On MDR Uncertainty 

The week saw shares of Paytm decline 8.35% to end at INR 882.10. Its market cap also went down to $6.53 Bn this week. 

The company’s stock tumbled as much as 10% during the early trade on Thursday (June 12) after the finance ministry rubbished reports about levy of a merchant discount rate (MDR) on UPI transactions.

Earlier, it was reported that the Centre was mulling levying MDR on UPI transactions above INR 3,000. The development came months after the Payments Council of India (PCI) wrote to the central government to consider imposing MDR on transactions over INR 2,000 for large merchants. 

Levying MDR on UPI transactions will shore up the revenue of UPI players. Paytm, which is the third largest UPI player, is expected to benefit significantly if this happens, given its large user base. 

Brokerage firm UBS estimates that even a 1 basis point contribution from MDR or an increase in government incentives could significantly support Paytm’s net payment margins.