New-Age Tech Stocks Regain Momentum; Zaggle Emerges As The Biggest Gainer This Week

Indian new-age tech stocks witnessed positive momentum this week in line with the broader market, which received a boost as the country reported faster-than-expected GDP growth in the third quarter of the ongoing financial year.

Eleven of the 19 new-age tech stocks under Inc42’s coverage saw a northbound movement this week, gaining in a range of 0.5% to over 24%. Zaggle emerged as the top gainer during the week.

CarTrade Technologies (up 11.7%), PB Fintech (up 6.4%), Nykaa (up about 5%), and Zomato (up 2.2%) were among the gainers.

On the other hand, shares of eight new-age tech stocks dipped during the week in a range of 0.5% to 5%. Mamaearth turned out to be the biggest loser this week, with the stock falling 5.5%, followed by Yudiz (down 4.4%).

Nazara Technologies, Fino Payments Bank, DroneAcharya, Yatra, IndiaMART, and Tracxn were the other losers during the week.

In the broader domestic equity market, despite the volatility, Sensex rallied 0.91% to end the week at 73,806.15 while Nifty50 rallied 0.7% to 22,378.4. The indices made sharp gains on Friday, day after the release of the Q3 GDP numbers. 

Siddhartha Khemka, head of retail research at Motilal Oswal, said that the domestic equities surged to a new high after India’s GDP saw an impressive 8.4% growth in Q3, driven by robust manufacturing, highlighting the inherent strength and potential of the economy. 

Khemka expects the ongoing momentum to continue and the market to take cues from a fresh set of economic data next week. 

It is pertinent to note that this week saw an extra trading day, with the market opening on Saturday (February 3) for a special trading session to test Disaster Recovery Sites of the exchanges.

Speaking on the market performance, Prashanth Tapse, senior VP (research) at Mehta Equities, said that despite the sharp rally on Friday, volatility cannot be ruled out due to concerns about delays in rate cuts by central banks, conflict in the Middle East, and expensive valuations of local stocks. 

However, the upsurge shows that investors are willing to place bullish bets on Indian stocks amid continuity in economic policies and a robust investment climate, he added.

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

The total market capitalisation of the 19 new-age tech stocks under Inc42’s coverage stood at $55.49 Bn at the end of this week as against $44.9 Bn last week.

Paytm Continues To See Volatility 

Shares of fintech major Paytm, which have been under pressure for the last one month following the announcement of banking restrictions by the Reserve Bank of India on Paytm Payments Bank, continued to see volatility this week as well. 

The stock largely witnessed sideways movement but gained 1.7% during the week. It ended Saturday’s special trading session at INR 414.5 on the BSE, 2.6% lower from Friday’s close.

Let’s take a look at the new developments this week at Paytm:

• In one of the biggest developments, Paytm founder and CEO Vijay Shekhar Sharma stepped down from the Paytm Payments Bank board, which is set to discontinue its banking operations by March 15.
• Paytm also agreed to discontinue various inter-company agreements with its Paytm Payments Bank.
• Reportedly, Paytm is expected to have applied for a third-party application provider (TPAP) licence in partnership with Yes Bank and Axis Bank. 
• Amid the ongoing troubles, the Financial Intelligence Unit-India (FIU-IND) imposed a penalty of INR 5.49 Cr on Paytm Payments Bank for violating money laundering norms. However, the company said that it pertained to issues within a business segment that was discontinued two years ago.
• While the shares are under pressure, SoftBank offloaded over 2% stake, or 1.37 Cr shares, in Paytm this week.
• Meanwhile, Paytm is also reportedly set to restart its loan disbursals from the first week of March, after it hit a pause amid the crisis at the payments bank.

Analysts expect the volatility in the stock to continue, along with selling pressure. 

Rupak De, senior technical analyst at LKP Securities, said that Paytm is currently a sell-on-rise kind of stock.

“From the current level, it might move up towards INR 500 in the short term but those rallies will be used to reduce exposure in the stock,” De said. 

Zaggle Emerges As The Biggest Gainer

Shares of fintech SaaS startup Zaggle jumped over 24% during the week on the back of its multiple partnership announcements. 

• On February 24, Zaggle said it was contracted to be a co-brand partner with Nishi Forex, an authorised dealer for forex cards, to carry out activities such as sales and distribution, marketing and campaigning, bundled with Zaggle expense management to drive card spending and greater usage of the software
• Zaggle also entered into an agreement with Europ Assistance India Pvt. Ltd to provide the latter with Zaggle’s benefits & expense management platform and its business spends management platform
• The startup has entered into an agreement with Axis Bank to be a referral partner of the bank in carrying out activities such as sales and distribution, marketing and campaigning

Shares of Zaggle have been on a sharp upward rise since the end of January and have gained over 52% since the end of the month. They closed the week at INR 358.15 on the BSE.

PB Fintech Continues To Rally 

Shares of PB Fintech, which have witnessed a sharp rise since the fintech startup’s announcement of its foray into the re-insurance space, continued their upward trajectory this week.

Last month, the parent entity of insurtech major Policybazaar said that it has received an in-principle approval from the Insurance Regulatory and Development Authority of India (IRDAI) to upgrade its licence and enter the reinsurance business.

On February 28, PB Fintech confirmed that the insurance regulator has granted the certificate of registration to Policybazaar to act as Composite Insurance Broker, with effect from February 28, 2024.

“With grant of new Certificate of Registration, the category has been changed from Direct Insurance Broker (Life & General) to Composite Insurance Broker,” the exchange filing said.

Shares of PB Fintech gained in four consecutive trading sessions at the beginning of the week but then shed some of the gains to end the week at INR 1,115.15 on the BSE. Overall, the shares gained 6.4% during the week.

The stock has gained over 40% year to date.

However, LKP Securities’ De said that the stock has now formed a reversal kind of pattern on the daily charts and might move down towards INR 1,050-INR 1,030 in the short term due to profit booking.

The resistance for the stock is at INR 1,130, he added.