Market expert Shankar Sharma: Shares of New Age tech companies, which became the “darling” of fund managers and retail investors till a few months ago, suffered major sell-offs on Monday. Shares of Zomato, Paytm, PB Fintech, Cartrade, Nykaa, Fino Payment Banks fell below their listing prices. While the shares of Paytm and Cartrade have lost more than 50 per cent from their issue prices, star performer Zomato is not far from the issue price after performing well for the first three months after the listing. Independent market expert Shankar Sharma, who is known for his bearish calls vis–vis the bullish, cautioned that there is still room for downside in these stocks.
Shares of new age tech companies have increased a bit
In an interview to CNBC TV-18, Sharma said that no one should be surprised if the shares of new age tech companies break 80-90 per cent by the end of 2022. Sharma said the market seems to be heading towards normalization which was “a little too high”. Sharma said, this growth started from the unlisted space, which were actually venture capital funded companies that have entered the stock market through listing in the last six months.
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Almost no one deserves this valuation
Sharma said, “Almost all of them have no valuation merit at all. Their business model is related to commodity making, there is no specialty in any of them that they get such crazy valuations. They have already fallen 20-50 per cent and may fall 50 per cent more now. These are still not cheap.”
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But, India is a better place in emerging markets
He said that due to the increase in prices, many segments of the market have moved into the overvalued zone. However, he conceded that India is a better place than other emerging markets and can do well in 2022. India has a solid buffer in terms of domestic equity.
There are still good stocks in the chemical and pharma sector
Foreign funds have sold Rs 8,000 crore so far in January, but brokers say interest from individual investors, especially the wealthy, is still strong. Over Rs 10,000 crore is being invested in mutual fund schemes through Systematic Investment Plans (SIPs), adding to the problems of fund managers. Sharma said that there are many stocks in the chemical and pharma sectors which are still cheap.
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