Zomato shares were trading below their issue price for the first time on 15 February 2022. On February 15, Zomato’s shares had come down to a low of Rs 75.75 on the BSE. Whereas its issue price was Rs 76 and the company’s shares were listed at Rs 116. This morning Zomato shares were trading up 1.94% at Rs 81.50. Selling in New Age Tech shares in the US markets has also affected Indian stocks. Market experts say that inflation is increasing continuously all over the world. Inflation in America has broken the record of the last 40 years. In such a situation, the central banks of all the big countries of the world are preparing to increase the interest rates to deal with inflation.
If market analysts are to be believed, the first and the biggest impact of this hike in interest rates will be seen only on these new generation tech stocks with high valuations. The market is already worried about their expensive valuations. Meanwhile, the Ukraine crisis also badly spoiled the market sentiment and after that all-round sell-off in the market has led to a beating of new generation tech based stocks like Zomato, Nykaa and Paytm.
What will happen next for Zomato?
In the last one month, the stock of Zomato has seen a decline of 35 per cent and its market cap has come down from Rs 133,000 crore to Rs 65,000 crore as of Monday’s closing. Zomato’s listing was met with much fanfare last year and after that it did not look back and it had doubled in a few days but recently there has been a spurt in the concern related to loss making new generation tech stocks. And the pressure has been seen on them.
Many market analysts say that in this heavy downtrend, there may be a buying opportunity in these technology-based new age stocks. Experts also say that Zomato is focusing on expanding its business. Due to which its outlook looks positive. Most of the analysts believe that one should buy this stock at the current price. This stock can be seen doubling in the next 12 months.
What will the company do?
But experts also have to say that the company will have to develop a business model that is beneficial for both the restaurant and the restaurant. Because if there will not be a restaurant to cook food for you, then how will you be able to do food delivery. Experts are giving this advice on the basis of reports in which it is often said that what once started as a boon for restaurants, Zomato has become a big bad bully for them today.
(This article is courtesy of Equitymaster.com.)
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