Most of the listed new age business stocks have not only fallen from their 52-week high, but have also weakened from the listing price.
New Age Business Stocks: Looking at the trend of the primary market last year, there has been a lot of discussion about ‘HOT themed’ stocks. In the market, many such companies got their shares listed which were related to the theme of new age business. These include stocks like Paytm, CarTrade Tech, Zomato, Nykaa, Fino Payments, PB Fintech and AGS Transact. But the shares of most of these have been severely beaten. There was a lot of discussion about them at the time of IPO, but after listing, investors have distanced themselves from most of the stocks. The stocks of many of these companies have gone back to their issue price or even weaker. After all, what is the reason that their shares are continuously declining.
bull market run
Santosh Meena, Research Head, Swastika Investmart, says that most of the listed new age business stocks have not only fallen from their 52-week high, but have also weakened from the listing price. Some shares are even below the issue price. The main reason for this is that many of these companies had brought their IPOs riding on the enthusiasm of the bull market run. The valuation of their IPOs was 30 to 50 times the revenue. As stock prices track the fundamentals of the underlying business, these new age companies have got a realty check in the market, as sooner or later these companies have to report profits.
No clarity on business model and future outlook
He says that during the recent IPO wave, investors have made mistakes of not paying attention to valuations. But now they’ve realized that chasing a hot theme usually doesn’t always work. Because of this, investors are now staying away from those stocks, which have high valuations and whose business model and future outlook are not clear. Whereas those who do not have any solid competitive advantage. Inflation and tight supply chain conditions are forcing central banks to end the era of ultra low interest rates. Because of this, investors around the world are losing interest in non-profitable tech stocks.
What’s up with which stock?
One 97 Paytm: 73 percent weaker than the issue price
PB Fintech: 24% weaker than issue price
Fino Payments: 50% weaker than the issue price
FSN E-Co Nykaa: 31 percent weaker than record high
CarTrade Tech: 65 per cent lower than the issue price
Zomato: Shares come back on issue price
ABSL AMC: 29 per cent weaker than the issue price
(Disclaimer: The views expressed here on the shares are those of the market experts. These are not the personal views of The Financial Express. Markets are risky, so take expert opinion before investing or selling any stock.)
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