The shares of online food delivery platform Zomato and online insurance providing platform PolicyBazaar have seen heavy selling for the past few days. This sell-off is proving to be fatal for both of these investors – Info Edge India.
Info Edge India is an internet company that runs web portals like Naukri.com and Jeevansathi.com. The company’s shares touched a record high of Rs 7,465.4 on October 19 and have since dived nearly 40 per cent. One of the main reasons behind this has been the similar big decline in its investment companies like Zomato and PB Fintech (PolicyBazaar).
Info Edge holds 15.23 per cent stake in Zomato, which was valued at Rs 20,190 crore at the peak of Zomato’s shares. However, with Zomato’s shares falling 45 per cent in the last three months, its value has now come down to Rs 11,032 crore.
Similarly, Info Edge’s stake in Policybazaar’s parent company PB Fintech was valued at Rs 8,803 crore just after its listing in November. But after a fall of nearly 44 per cent in the shares of PB Fintech in the last two months, the value has now come down to Rs 4,896 crore.
Also read- Yes Bank Share Price: Sensex fell 1200 points but Yes Bank shares rose 3%
New-age tech companies like Zomato and Policybazaar have seen a sell-off in the recent past due to rising bond yields in India and overseas. Experts say that due to low bond yields, the valuations of these companies were much higher than their fundamentals. However, now with the rise in bond yields, big investors have started withdrawing their money from these companies.
The valuations of Zomato and Policybazaar were reported to be very high even at the time of their IPO launch in 2021. However, despite this, investors then invested heavily in them due to the ongoing boom in the stock market and the environment of low-interest rates.
What should traders do?
Ruchit Jain, Technical Analyst at brokerage firm Angel One, said any disruption could add to the selling pressure in the stock. In the short-to-medium term, the stock is likely to trade lower near Rs 4,200. “Unless there is a change in the price action of the stock with huge volumes, one should not go against the flow and bet in this stock,” he said.
On Monday, InfoEdge shares closed at Rs 4,502.75 per share, down 5.46 per cent on the NSE. Shares of Info Edge have lost about 20.06 per cent in January so far.
.
