IPO listings find Rs 2 lakh crore erosion, tech startups account for half

The selloff within the market earlier few weeks has worn out over Rs 2 lakh crore from not too long ago listed shares that embody main ones like One97 Communications (Paytm), FSN E-Commerce Ventures (Nykaa), Zomato, PB Fintech (PolicyBazaar) and CarTrade. However, Nazara Technologies, a gaming firm that’s backed by billionaire investor Rakesh Jhunjhunwala, has remained largely insulated from the latest rout in tech-enabled, consumer-facing companies.

Consider this: Since itemizing a bit over two months in the past, Paytm, the digital cash switch pioneer in India, has misplaced practically half its worth to a present market capitalisation of Rs 59,472 crore. Worse, from its IPO value of Rs 2,150, on the present market value of Rs 917 on the BSE, it has misplaced over 57% of its worth. Similarly, on Monday, Zomato misplaced 20% and closed on the decrease circuit, whereas Nykaa, after dipping to its life-low of Rs 1,693 in the course of the day, closed at Rs 1,735. These two shares are nonetheless buying and selling at a premium to their respective IPO costs, whereas Paytm, CarTrade and PolicyBazaar are within the crimson.

Six tech-enabled, new age companies that listed in 2021 have collectively misplaced about Rs 1.2 lakh crore in market cap since itemizing. Nazara Tech, however, remains to be within the inexperienced with its market cap up practically Rs 3,000 crore since debut.

The selloff within the Indian market in these shares is partially as a result of latest tech rout within the US markets, merchants stated. In the US, the Nasdaq Composite index is down a bit over 18% and will technically enter bear territory if it falls 20% or extra from its latest peak in mid-November. There, skilled fund managers are shifting from shares of corporations that supply excessive development alternatives to these of established companies, referred to as worth shares. The same development is noticed in India too, analysts stated.

According to Arun Kejriwal, director on the funding advisory agency KRIS, since mid-2021, some of the tech-enabled corporations listed because the market was in a bull part. Although most had been loss-making, but the shares did effectively on the bourses, which in flip attracted a big quantity of traders. Now that there’s a slide within the US market, these shares are additionally dealing with warmth from the selloff by native traders.

“In the current situation, investors are sure to take a re-look at all recently listed stocks, particularly the loss-making ones,” Kejriwal stated. For lengthy, Dalal Street traders haven’t seen an IPO being withdrawn for lack of investor curiosity. “February-March could bring about an IPO that could bomb on the Street,” he stated, indicating that we could quickly witness an IPO being withdrawn.