New-Age Tech Stocks Fall In Line With Broader Market, EaseMyTrip, Delhivery Among Gainers

In another week of muted performance, a majority of the new-age tech stocks fell this week in line with the sharp decline in the overall Indian stock market.

Shares of a majority of the new-age companies fell, declining between 0.2% to 4%, with Nykaa becoming the biggest loser. Nykaa shares ended the week 3.7% lower at INR 168.05 on the BSE.

Foodtech unicorn Zomato’s shares fell 3%, ending Friday’s session at INR 62.15 on the BSE, while Paytm was also down 3%, ending the week at INR 527.8.

However, amid this downfall, Delhivery, EaseMyTrip, Fino Payments Bank, Cartrade Technologies, and Tracxn Technologies emerged as the gainers this week. Fino Payments Bank was the biggest gainer this week, with its shares rising over 7% on the BSE. 

Meanwhile, EaseMyTrip gained almost 6% on a weekly basis, ending Friday’s session at INR 55.55. In fact, analysts are expecting further gains in the share price. 

However, the Indian stock market slipped into the negative territory this week after the US Federal Reserve’s hawkish commentary and larger weakness in the global markets.

Benchmark indices Nifty50 and Sensex nosedived in two straight sessions, falling 1.23% and 1.36% to 18,269 and 61,337.81, respectively, this week.

“Markets seem to have taken pause after making new highs with Nifty down by 3% in the last few sessions. Markets are likely to remain in consolidative range due to lack of triggers in the near term. Also, lower participation from institutional investors due to upcoming year-end holidays would keep the markets lacklustre,” said Siddhartha Khemka, head of retail research at Motilal Oswal.

Investors are also expected to keep an eye on the US’ home sales data and quarterly GDP numbers that are set to be released next week. 

The 12 new-age tech stocks under our coverage ended this week with a total market capitalisation of $25.78 as against $27.36 Bn last week.

Paytm Share Buyback Evokes Mixed Response

Though Paytm shares declined 3% on a weekly basis, the stock has largely been trading sideways. The share buyback announcement didn’t have any significant impact on the stock immediately.

In The News For

• Earlier this week, Paytm’s board approved its share buyback plan of up to INR 850 Cr.
• Proxy advisory firms like Institutional Investor Advisory Services (IiAS) and Stakeholders Empowerment Services have raised questions on the share buyback, saying that Paytm is already running in losses and burning huge cash. They also asked if the share buyback was just a step to reward its pre-IPO shareholders.
• Paytm has not yet received the RBI’s approval for a payment aggregator licence.

The Street was expecting the share buyback to happen through a tender route given Paytm is a loss-making company. That’s the reason the Street turned negative as the people who wanted to offload their shares or the retail investors who wanted to participate in it would not be able to do so, opined Kunal Shah, senior technical analyst at LKP Securities.

“I think this is not going to impact the stock. In fact, it might show a sideways trend or might go further down. I am not expecting any momentum on the upside,” said Shah.

Echoing a similar tone, Jigar S Patel, senior manager, technical research analyst at Anand Rathi, said that Paytm shares may now remain range-bound and move sideways in the coming few weeks.

“The range will be around INR 490 to INR 550, and if it breaks INR 550-INR 555 level, only then can we see a rally till INR 600,” Patel added.

Another Pre-IPO Investor Sells Nykaa Stake

Nykaa shares fell in all five sessions this week. While the fall was less sharp at the beginning of the week, the shares fell 2.6% in the last two sessions of the week following Kravis Investment Partners offloading almost all of its stake in Nykaa.

The pre-IPO investor held a total of 53.8 Lakh share of Nykaa or 1.13% stake till September this year, prior to the startup’s bonus share issue. 

On Thursday, the venture capital firm sold INR 629 Cr worth of shares in the beauty ecommerce startup via multiple block deals. On Friday, Nykaa fell 1.52% compared to Thursday’s close, ending the week at INR 168.05 on the BSE.

On a weekly basis, Nykaa was the biggest loser this week as it declined 3.7%.

However, while Kravis Investment Partners sold its stake, ICICI Prudential bought 87.7 Lakh shares of Nykaa, worth almost INR 150 Cr this week. Goldman Sachs Investments Mauritius and Goldman Sachs (Singapore) Pte together bought a total of 1.3 Cr shares worth INR 220.9 Cr. Canada Pension Plan Investment Board also bought  INR 158.2 Cr worth of  Nykaa shares.

Last month, several other pre-IPO investors of Nykaa, including private equity firm Lighthouse India Fund III, TPG Capital, and Mala Gopal Gaonkar, offloaded large amounts of their stakes in Nykaa, which hit the share price.

Currently, Nykaa’s performance is a bit “dicey”, believes Anand Rathi’s Patel. “There might be a chance that in the coming few weeks the shares will hit a new low at INR 155-INR 156 level. Afterwards, it can move up from there till INR 180,” said Patel.

Delhivery Shares Regain Momentum

After being on a downward trend for the last few weeks, shares of Delhivery have once again started regaining momentum. Its gains during the last week continued as its shares moved up by 2% this week, emerging as one of the few gainers among its tech peers.

There were no major business-specific developments this week in the company.

Earlier this year, Delhivery had joined the likes of Mahindra & Mahindra, Adani Enterprises, and Godrej Consumer to become one of the top 100 companies on the BSE in terms of market capitalisation. Its market cap had hit INR 50K Cr mark. However, the meltdown in the tech stocks resulted in sharp erosion in its market cap.  Currently, the startup’s market cap stands at INR 26,162 Cr.

In The News For

• Delhivery went live on the Indian government’s Open Network For Digital Commerce (ONDC) platform this week 

“Delhivery is witnessing some consolidation between INR 340 and INR 380, and it might break this level as indicators are showing positivity,” said Patel. “In the coming few weeks, we can see Delhivery at around INR 400 level and its support would be INR 330.” 

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