Zomato, Paytm Surge As New-Age Tech Stocks Zoom On Broader Market Recovery

The Indian equities market seems to have gained fresh wings in the third week of March, clocking in two days of upwards movement. As a result of this revival, new-age tech stocks also made some recovery today. 

Barring MapmyIndia and SME-listed companies DroneAcharya and Yudiz, shares of 29 new-age tech stocks under Inc42’s coverage ended today’s trading session in the green. Emerging from an all-time low of INR 231.05 yesterday, shares of MobiKwik rallied 19.99% to end today’s trading session at INR 298.

It is pertinent to mention that the company’s shares tanked to an all-time low yesterday after the end of the three-month anchor lock-in period. The lock-in expiry unlocked 5 Mn shares, equivalent to 6 percent of the outstanding equity of the company. 

Similar to MobiKwik, Ola Electric also emerged from an all-time low of INR 46.32 during early hours of trade today to end 12.56% higher at INR 52.80. Despite the uptick today, the extended selling pressure on Ola Electric has seen its market cap erode by $1.3 Bn to $2.7 Bn compared to its IPO valuation of $4 Bn. 

Paytm emerged as the third biggest gainer today, with its shares gaining 7.79% to end at INR 742.45. Besides the broader market rally today, investor interest in Paytm peaked as the company announced that its investment tech arm Paytm Money has received the licence from the Securities and Exchange Board of India (SEBI) to operate as a registered research analyst. 

Trailing Paytm in the list of gainers was Zomato, with its shares gaining 7.11% to end at INR 218.35. With the rally, the company has gained about $2 Bn in market cap since Friday’s close to end Tuesday’s trading session at $24.3 Bn. 

The list of gainers also included names like RateGain, Unicommerce, FirstCry, Swiggy, and Yatra, which touched fresh lows over the past two weeks.

What Led To The Reversal In Sentiment?  

In the broader market, Sensex ended the day 1.53% higher at 75,301.26 and Nifty 50 gained 1.45% to close at 22,834.30. 

Commenting on the market uptick today, Vinod Nair, head of research at Geojit Financial Services, said that the uptick was driven by favourable global trends and domestic tailwinds. 

“Improved retail sales data from the US and China boosted investor confidence, while mid- and small-cap stocks outperformed, with all major sectors registering gains. The anticipated rebound in domestic earnings, along with a recent decline in the dollar index and lower crude prices, is expected to support this recovery,” he added. 

Looking ahead, experts are of the opinion that a prolonged uptick for the Indian markets is on the cards. “The index has moved above the critical 21 EMA on the daily chart, signalling a bullish short-term trend. The RSI is also in a bullish crossover and rising, further supporting the positive momentum. In the short term, the index may move towards 23,150, while support is placed at 22,700 on the lower end,” Rupak De, senior technical analyst at LKP Securities, said. 

Despite the gains today, foreign institutional investors (FIIs) remained net sellers. During today’s trading session, FIIs sold equities worth INR 4,488.45 Cr.