New-Age Tech Stocks Rally Amid Rally In Broader Market, Paytm Biggest Loser This Week

New-age tech stocks continued their winning run this week on the back of a recovery in the broader domestic equity market.

Ten out of the 16 new-age tech stocks under Inc42’s coverage gained this week between 1% and 15%, with the recently-listed Yudiz emerging as the biggest winner.  

Yudiz got listed on the NSE SME platform on August 17 this year at INR 185 apiece. This week, the startup’s shares jumped 14.8% to end Friday’s session at INR 202.7.

CarTrade Technologies, Nazara, EaseMyTrip, Delhivery, and Zomato were among the other gainers of the week.

However, despite the revival in the broader market that broke the five-week losing streak, shares of Paytm, Nykaa, DroneAcharya, MapmyIndia, Fino Payments Bank, and ideaForge fell this week. Paytm slumped almost 5%, emerging as the biggest loser this week.

In the broader market, Sensex rose 0.77% while Nifty 50 gained 0.9% this week. The benchmark indices rallied significantly on Friday alone, as Sensex jumped 0.86% and Nifty 50 0.94% to end the week at 65,387.16 and 19,435.30, respectively.

The rally on Friday was largely aided by Q1 Gross Domestic Product (GDP) numbers. According to the National Statistical Office’s data, India’s GDP grew by 7.8% in the April-June quarter of FY24 as against a 6.1% growth in the preceding quarter – Q4 FY23.

Stepping into the new month, the market is brimming with various domestic and global macroeconomic indicators that are expected to sustain their momentum, said Pravesh Gour, senior technical analyst at Swastika Investmart.

However, he said that “below normal” monsoon rainfall this year is expected to have a significant impact on market trends.

Meanwhile, Amol Athawale, vice president of technical research at Kotak Securities, said, “While there will be some challenges going ahead due to weak monsoon activity, overseas funds may continue to bet on India due to signs of strong growth performance going ahead.” 

“Technically, the Nifty has formed a double bottom formation on daily and intraday charts, which indicates a strong possibility of a fresh uptrend rally from the current levels,” he added.

Now, let’s dig deeper into the performance of some of the new-age tech stocks this week.

 

The 16 new-age tech stocks under Inc42’s coverage ended the week with a total market capitalisation of $37.24 Bn as against $36.36 Bn last week.

Paytm The Biggest Loser

Reversing the 4.6% gain last week, shares of Paytm declined 4.7% this week. 

The drop came after Antfin (Netherlands) Holding B.V. sold 2.27 Cr shares, or a 3.6% stake, in the fintech major last Friday.

Besides, we must also note that after months of anticipation, Reliance announced this week that its newest entity Jio Financial Services (JFS) will offer products in the payments and insurance segments.

Earlier, many analysts said that the entry of deep-pocketed JFS could pose a significant competitive threat to Paytm.

During Reliance’s annual general meeting, its CMD Mukesh Ambani called JFS as the world’s highest capitalised financial services platform at inception.

However, Paytm’s gains still remain a significant 61.5% year to date (YTD).

Kotak Securities’ Athawale said Paytm looks positive on the technical charts and the stock is holding a higher-bottom formation and is ready for the next rally. 

“The immediate support for the stock is around INR 830-INR 840 and on the higher side INR 920 is possible,” said Athawale, adding that further upside is also possible which can see the stock rising up to INR 940.

Nazara Touches 52-Week High

Shares of Nazara Technologies jumped 8.2% on Thursday to reach a 52-week high of INR 814.30 on the BSE this week. Though the stock pared some of its gains to end the day at 777.75, it was at a level last seen at the end of April last year.

Overall, Nazara shares gained 7.4% this week, ending Friday’s session at INR 759.2 in the exchange.

In The News For:

• Nazara said this week it is looking to raise capital via issuance of equity shares or securities on a preferential basis and would seek board approval for the same.
• As per a report, Zerodha founder Nikhil Kamath could possibly increase his stake in the gaming company to 3.5% from his current stake of around 1%.

Though the stock is facing some profit booking at a higher level, the texture is largely bullish, said Kotak Securities’ Athawale.

“The immediate support for the stock is around INR 720-INR 725. As long as the stock is trading above that, the upside momentum is likely to continue,” said Athawale, adding that Nazara shares could reach INR 810-INR 825 in the medium term.

Nazara shares are currently training around 31% higher YTD.

SoftBank Offloads Almost Half Of Its Stake In Zomato 

SoftBank’s SVF Growth (Singapore) offloaded Zomato shares worth INR 947 Cr in a block deal this week. 

As of quarter ended June 2023, SVF held 28.7 Cr shares in Zomato, which translated to a 3.35% stake in the foodtech major.

In its latest block deal, the VC major sold 10 Cr Zomato shares, or 1.16% of its stake in the company.

Following SoftBank’s stake sale, Zomato shares fell in two consecutive sessions, reversing the sharp rise seen at the beginning of the week.

Despite the fall, the startup managed to gain 6.9% this week, ending Friday’s session at INR 97.23 on the BSE.

It must be noted that the shares sold by SoftBank were bought by several investment firms and banks, including BNP Paribas Arbitrage, Citigroup Global Markets Mauritius, Axis Mutual Fund, and Morgan Stanley Asia Singapore.

Meanwhile, Zomato, on Friday, informed its stakeholders that Lunchtime, a step-down subsidiary of Zomato Limited, situated in the Czech Republic initiated the liquidation process.

“…the dissolution of Lunchtime will not affect the turnover/revenue of the Company,” Zomato said.

This week, Zomato also announced the launch of a chatbot, Zomato AI, to enhance the customers’ overall food ordering experience.

After a rally, Zomato shares have started consolidating but the formation is positive, said Kotak Securities’ Athawale. 

The immediate support level for the stock is at INR 92-INR 93 and above that, it could rally till INR 110-INR 115 in the medium term, he added.

This week, Zomato once again crossed the $10 Bn market cap mark.