In the stock market, the stock of many new-age tech companies has seen a huge decline for some time now. The effect of this decline is now visible in the unlisted market or even in the gray market. Investors are moving away from the stock market as well as the unlisted market. Dealers say that in the next few days many companies are ready to be listed in the market. However, despite this, there has been a sharp decline in the trade volume of these stocks in the unlisted market, which indicates the declining interest of the investors.
Manan Doshi, Co-Founder, unlistedarena.com said, “The stock market is losing its gains just before the Union Budget. Similarly, the unlisted market is also not able to rise above its recent low. The unlisted market is showing such a big decline. Not common as it mostly consists of long term investors.”
Sentiment deteriorating in the unlisted market started with the poor listing of Paytm’s parent company One97 Communications. The shares of Paytm were listed on the stock market in November last and on the very first day it had fallen by about 27 per cent from its issue price. Since the listing, Paytm’s shares have fallen by about 51 per cent and its market value has dropped by about Rs 70,000 crore.
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Global and Indian stock markets are witnessing a sell-off due to fears of interest rate hike in the US and some geopolitical problems in Eastern Europe. Due to this, dealers are warning of a fall in trade volume in the unlisted market as well.
New-age tech companies have been the most affected by the fear of interest rate hikes. Many technology stocks including Paytm, Zomato, PB Fintech, Nykaa and Cartrade have been witnessing continuous decline for the past several trading sessions. Investors fear that the increase in interest rates could lead to a sharp fall in the net present value of future earnings of these companies, due to which they are witnessing selling pressure.
Aditya Kondavar, Chief Operating Officer (COO), JST Investments said, “It is a well-known fact that a significant amount of foam has accumulated in the unlisted market. Tech companies) shares fell sharply, the unlisted market also sat down.”
Apart from the steep fall in the stock markets, the issue prices of IPOs like PB Fintech and AGS Transact Tech also spoiled the sentiment. Investors refrained from taking risk in the unlisted market due to the issue price volatility.
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Both Fintech and AGS Transact Tech were trading at Rs 1,200 and Rs 220, respectively, in the unlisted market prior to their IPOs. Whereas their issue price was fixed at Rs 980 and Rs 175 respectively, much lower than this.
However, the unlisted market is still not witnessing a significant decline as seen in the official listed market. In the unlisted market, the shares of API Holdings were trading at Rs 107 in December, which came down to Rs 98 on January 27. At the same time, there was no change in the shares of Le Travenues Technologies, the owner company of Ixigo and it is trading at a price of Rs 194.
Shares of Sterlite Power Transmission have declined from Rs 1,390 to Rs 1,260 in the unlisted market in the last one month. On the other hand, shares of MobiKwik Systems declined from Rs 900 to Rs 860. Shares of Tamilnad Merchantile Bank declined from Rs 640 to Rs 625, while shares of HDFC Bank’s subsidiary HDB Financial rose from Rs 895 to Rs 900 during the same period.
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