SUMMARY
After falling in three straight sessions, shares of Nykaa and Delhivery ended the week 13% and 7.8% lower, respectively, on the BSE
After its tepid market debut last week, Tracxn shares fell a whopping 16.6% this week, closing at INR 76.1
Zomato, Paytm, and Fino Payments Bank were the new-age tech stocks which ended in the green this week
The new-age Indian tech stocks continued to be under pressure this week despite the overall stock market showing bullish trends. Newly-listed Tracxn Technologies, CarTrade Technologies, and Nykaa and Delhivery, whose lock-in period for per-IPO investors end next month, were the worst hit among the new-age tech stocks.
After falling in three straight sessions, Nykaa and Delhivery stocks ended the week 13% and 7.8% lower, respectively, on the BSE. Both the stocks were under severe selling pressure since last week and touched new record lows. On Friday, Nykaa touched its record low of INR 975.5 on the BSE, while Delhivery touched INR 350.05.
In fact, the stocks were the two biggest losers this month on the Nifty 500 index.
Policybazaar parent PB Fintech was also among the top 10 losers on the Nifty 500 this month. The insurtech startup, whose share lock-in is also ending in November, saw extreme volatility over the past few weeks. After touching their record low last week, Policybazaar shares regained some momentum this week, ending Friday’s session over 3% higher at INR 393.6 on the BSE. On a weekly basis, the shares rose almost 4%.
On the other hand, Tracxn continued to face a tough time since its listing due to the negative sentiment surrounding new-age tech stocks. After its tepid market debut last week, Tracxn shares fell a whopping 16.6% this week. The shares ended Friday’s session at INR 76.1, about 5% lower than its IPO issue price of INR 80.
However, Zomato, Paytm, and Fino Payments Bank ended in the green this week. The share lock-in period for both Paytm and Fino Payments Bank also expires next month.
This week also witnessed a one-hour special Muhurat trading session on the day of Diwali on Monday. In line with a positive sentiment in the overall stock market, most new-age tech stocks ended the special trading session in green.
The Indian stock market was also upbeat during the week despite negative global sentiments. The benchmark indices NSE Nifty50 and BSE Sensex rose 1.2% and 1.1% this week, ending Friday’s session at 17,786.8 and 59,959.85, respectively.
The Indian stock exchanges were shut on Wednesday (October 26) on the occasion of Diwali Balipratipada.
Now, let’s dig deeper into the weekly performance of some of the listed new-age tech stocks from the Indian startup ecosystem.
The total market capitalisation of the 12 new-age tech stocks stood at $27.19 Bn versus $27.62 Bn last week.
Nykaa Continues To Struggle
Ahead of the expiry of its share lock-in period on November 10, Nykaa continued to be under pressure for the second straight week. Though the shares gained slightly during the Muhurat trading session on Monday, the falling streak continued in the next three sessions, taking it over 12% below IPO issue price of INR 1,125.
Currently at INR 983.15, Nykaa shares are trading almost 60% below their debut price on the BSE.
While much has been spoken about how the analysts are divided on Nykaa’s fate and growing competition in the market, some analysts are still hopeful about the stock in the long term. However, the current scenario has created a sense of uncertainty even among the market analysts.
Speaking to Inc42 earlier this week, Kunal Shah, senior technical analyst at LKP Securities, said that Nykaa stocks were already trading at their 52-week low and a minor bounce back was expected.
Amol Athawale, deputy vice president of technical research at Kotak Securities also spoke on a similar note as the stock fell further this week. “The stock is consistently facing selling pressure at a higher level. The formation is weak, but there is a possibility of a quick pull-back rally if the stock succeeds to trade above INR 1,030,” he said.
Even if that pull-back rally takes place, it would likely continue till INR 1,060-INR 1,080 on the higher side, he opined.
Athawale also noted that since the stock had fallen below INR 1,000, it would create additional pressure. On the downside, the immediate support level would be INR 975-INR 970, he added.
Delhivery Shares Down Almost 40% In A Month
Shares of Delhivery were on a rise in the first few months after their listing earlier this year. Its market cap rose to over INR 50,000 Cr in July, making it one of the top 100 companies in terms of market cap. However, in just two months, Delhivery’s market cap has almost halved, and currently stands at INR 25,890.7 Cr.
Investors seem to be worried about the startup’s business performance. The stock first took a major hit after Delhivery reported a 208% widening of its consolidated net loss to INR 399.3 Cr in Q1 FY23 with some slowdown in its PTL (partial truckload) business.
Second, the startup released a muted Q2 operational update, saying its PTL business had started recovering but the volumes in its supply chain services and truckload businesses declined in the quarter.
Investors are no more oblivious to the fact that the slow down in ecommerce spending due to inflationary pressure would hit Delhivery’s business. Besides, the stock’s lock-in period is expiring on November 24 and there are chances of further sell-off by Delhivery’s pre-IPO investors, which is creating further pressure.
Despite the selling pressure on Delhivery stock, which fell almost 4% on Friday alone, closing the week’s last session at INR 356.45, Kotak Institutional Equities upgraded the stock to ‘add’ from ‘reduce’ this week.
Though the brokerage cut its fair value for the stock to INR 415 from INR 540 earlier, it said that Delhivery was well-positioned both operationally and strategically to weather any near-term weakness in industry growth.
Speaking to Inc42, independent market expert Manish Shah said that Delhivery shares could see a bounce back after the date of lock-in passes.
“The oscillators are showing a deep oversold reading and if we apply measuring technique prices then we see the price has support at INR 300-INR 290,” said Shah. “Price decline of this magnitude is not sustainable as prices will revert back to the mean.”
Meanwhile, Kotak Securities’ Athawale expects the downward trend to continue. “INR 400 would be the immediate resistance. On the downside, INR 325-INR 315 is also possible,” he added.
MapmyIndia Posts Muted Results
Shares of digital mapping startup MapmyIndia fell as much as 3.4% to INR 1,310 on the BSE on Friday, a day after it reported almost flat profit for Q2 FY23. However, the stock recouped some of the losses during the session, ending at INR 1,315.50.
Despite a 34.6% year-on-year (YoY) increase in its operating revenue to INR 76.31 Cr during the September quarter, the startup reported a quarterly profit of INR 25.37 Cr as against INR 25.39 Cr in the corresponding quarter of FY22.
The investments by the startup during the quarter led to its net profit remaining unchanged from the corresponding quarter of the previous year. From making a strategic investment in KOGO to acquiring Gtropy and launching its panoramic, three-dimensional experience with Mappls to compete with Google Street View, MapmyIndia made several investments during the quarter.
In a statement, MapmyIndia said it makes investments responsibly “with an eye towards the future, balancing both short- and long-term goals for growth and earnings”.
Shares of MapmyIndia have historically performed well compared with other new-age tech stocks, but there have been some concerns in the recent past after Google Maps launched its Street View service in India.
“The stock is witnessing non-directional activity. I think, perhaps traders are waiting for the breakout confirmation on either side,” said Athawale.
Currently, the stock is witnessing a non-directional activity near the 50- and 20-day moving average, and the lower boundary for it is around INR 1,300 and the upper boundary is around INR 1,380, he said.
As per Athawale, the stock can reach INR 1,420 level in the medium term if it breaches the level of INR 1,380.
However, the selling pressure is likely to increase below INR 1,300. If the stock closes below INR 1,300, then INR 1,260 and INR 1,240 is also possible in the near future, he added.
At the current level, the MapmyIndia shares are trading over 16% below their debut price of INR 1,581 on the BSE.
