New-Age Tech Stocks Witness A Mixed Week; Mamaearth Steals The Show, RateGain Biggest Loser

Indian new-age tech stocks witnessed a mixed week, with stock-specific actions in some of them, amid mixed sentiment in the broader market. Of the 19 new-age tech stocks under Inc42’s coverage, 10 gained this week.

Newly-listed Mamaearth emerged the biggest winner as its shares jumped a whopping 43% this week, followed by Tracxn Technologies, which rallied 13%.

Others like Fino Payments Bank, Nykaa, PB Fintech, and Paytm also rose during the week in a range of 0.5% to 4% on the BSE.

On the other hand, nine new-age tech stocks declined between 0.2% and 9%, with RateGain as the biggest loser (down 8.5%).

Zomato, Nazara Technologies, Delhivery, and ideaForge were among the other losers this week.

In the broader market, benchmark indices Sensex gained 0.27% and Nifty50 gained 0.30% this week. However, Sensex and Nifty50 ended the last trading session of the week marginally lower at 65,970.04 and 19,794.70, respectively. 

Vinod Nair, head of research at Geojit Financial Services, said that the indices traded on a tepid note by the end of the week following weak German growth data. Besides, trading volume was limited due to the US market holiday on Black Friday and the Indian market holiday on coming Monday (November 27).

Santosh Meena, head of research at Swastika Investmart, said that global cues were favourable this week but investors are awaiting the results of the state elections in India. 

We must note that this week was also about IPOs as more than five companies launched their IPOs with Tata Technologies being the biggest one.

“Additionally, liquidity is tied up in primary markets due to the recent surge of IPOs… The market may experience some direction and increased volatility as we approach the November month F&O expiry,” Meena opined.

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

The total market capitalisation of the 19 new-age tech stocks under Inc42’s coverage stood at   $39.37 Bn at the end of this week as against $40.56 Bn last week.

Mamaearth Witnesses Massive Rally Post Q2 Earnings

Shares of recently listed Honasa Consumer Ltd, the parent entity of D2C unicorn Mamaearth, surged a massive 43% this week after the startup posted positive Q2 financial results.

On Wednesday, Mamaearth posted a profit after tax (PAT) of INR 29.4 Cr in the September quarter, a jump of almost 94% year-on-year (YoY). As against a net loss of INR 151 Cr in FY23, the company is profitable in H1 FY24. Mamaearth’s PAT stood at INR 54.1 Cr in the first half of FY24. 

The company’s operating revenue jumped 21% YoY to INR 496.1 Cr in Q2 FY24. 

While a majority of Mamaearth’s revenue growth came from online operations (40%), its growth in revenue from offline channels stood at 33% in H1 FY24.

Though the company made a muted market debut earlier this month, Mamaearth’s shares are now trading almost 47% higher than their listing price following this week’s rally.

The stock ended at INR 475.1 on the BSE this week.

Recently, Jefferies initiated its coverage on Mamaearth with a ‘buy’ rating. The brokerage also increased its price target on the company to INR 530 from INR 520 earlier after the Q2 financial statement.

Berkshire Hathaway Exits Paytm

 Paytm saw a major exit this week with Warren Buffett-led Berkshire Hathaway offloading its entire 2.46% stake in the company.

Following the stake sale, Paytm shares slumped 3.23% on Friday, shedding their 3.92% gains earlier in the week.

While the RBI’s tightening of norms for lenders disbursing unsecured loans dragged most banking and financing stocks, including Paytm, last week, the fintech major gained in the first four sessions this week.

In the News For:

• Berkshire Hathaway sold 1.56 Cr shares in Paytm, worth about INR 1,370.6 Cr, in a bulk deal on Friday. Some of those shares were purchased by Ghisallo Master Fund LP and Copthall Mauritius Investment Limited.
• BofA said in a new research note that RBI’s move will impact growth in Paytm’s personal loans business. On the other hand, Jefferies said that Paytm might witness earnings risk following the move.

On the back of these multiple factors, shares of Paytm gained a mere 0.6% this week.

Commenting on the stock, Jigar S Patel, senior manager, technical research analyst, said that Paytm might witness some profit booking right now. 

“Some FIIs and domestic investors might book profit at higher zones. There is a possibility that it might test INR 840 to INR 800 levels in the next one to two months,” said Patel, adding that one needs to wait and watch for meaningful corrections.

RateGain Becomes Biggest Loser

Shares of RateGain, which were on a sharp uptrend over the last one month, declined 8.5% this week, ending the week at INR 660.65 on the BSE.

RateGain shares nosedived 8.1% on Thursday, a day after the company announced the allotment of 139 equity shares of face value of INR 1 each to the eligible employees under its Stock Appreciation Rights, under RateGain – Stock Appreciation Rights Scheme – 2022.

Following the allotment, the paid-up equity share capital of RateGain increased to INR 117,777,952 from INR 117,777,813, RateGain said.

Earlier in the week, the travel SaaS company announced the completion of a capital raise of INR 600 Cr through a Qualified Institutional Placement (QIP).

RateGain said it will use the fresh funds for strategic investments, acquisitions, and inorganic growth, making further progress in building an AI-powered integrated tech stack for the travel industry.

RateGain shares have gained over 68% in the last six months this year.