Zomato Shares Up Nearly 2% As FTSE Increases Stock Weightage On Indices

Shares of Zomato rose 3% to INR 56.20 during intraday trading on Monday (August 8) on the BSE after FTSE announced an increase in the investability weight of the foodtech startup’s stock.

FTSE provides a variety of indices for stocks from developing and emerging markets globally for investors to target specific markets and segments.

It is set to increase the investability weight for Zomato to 24.9% from 17.2%, according to reports. Shares of Zomato closed 1.7% higher at INR 55.45 on the BSE on Monday.

FTSE announced the change in Zomato’s weightage across FTSE All-World Index, FTSE MPF All-World Index, FTSE Global Large Cap Index, and FTSE Emerging Index, and said it will come into effect from August 11.

As per Abhilash Pagaria, Head at Edelweiss Alternative & Quantitative Research, this would lead to buying of 19 Mn to 20 Mn shares at the close of August 10.

An increase in weightage results in buying of shares by the funds which follow the indices. 

For the uninitiated, investible weight factor is the unit that depicts the portion of a company’s total shares available to the investors, which can be freely traded on the stock exchanges. It is used in computing a company’s market capitalisation under free float methodology.

These are stocks not usually freely available for trading on the exchanges, hence, the stocks held by the entities with strategic interest in a company are eliminated from the total number of issued shares while calculating investible weight factor.

Other New-Age Gainers

Paytm was one of the biggest gainers among the new-age tech stocks on Monday. Its parent entity One 97 Communications’ shares ended the session over 6% higher at INR 834.30.

On Friday, Paytm reported narrowing of its loss sequentially in the June quarter. On a quarter-on-quarter (QoQ) basis, the fintech platform’s loss declined 15.3% to INR 645.4 Cr.

Despite the widening of loss on a year-on-year basis, brokerages are positive about the stock. 

Morgan Stanley increased its price target for Paytm to INR 785 from INR 675 driven by the results. However, the global brokerage said that ‘uncertainty remains’ and maintained its ‘equal-weight’ rating.

On the other hand, J.P. Morgan continues to remain ‘overweight’ on the stock. The brokerage sees Paytm retaining the highest revenue and profit levels among local vertical and global horizontal peers.

Meanwhile, following the announcement of its Q1 FY23 results on Friday, MapmyIndia’s parent entity C.E. Info Systems’ shares ended Monday’s session about 3% higher at INR 1,344.35 on the BSE.