Zomato share price plunged to a fresh all-time low of Rs 75.75 per share on Tuesday, falling below the company’s issue price of Rs 76 a share. The stock of the BSE-listed food-tech firm is down nearly 40% from its listing price, and is down over 55% from its peak, hit in November last year. Zomato stock recovered some losses and was trading at Rs 83.15 a share in afternoon trading.
Share prices of other newly listed tech companies such as FSN E-Commerce Ventures (Nykaa) and One97 Communications (Paytm) were also trading near record lows on the BSE. Shares of One 97 Communications hit a 52-week low of Rs 840.05 apiece, down about 60% from IPO issue price of Rs 2,150 a piece. On the other hand, shares of FSN E-Commerce Ventures also touched record low of Rs 1,479 apiece.
Shares of new age tech firms are seeing this fall because even though they benefited from the optimism in the IPO market, the stock has been overpriced, Vishal Wagh, Head of Research Bonanza Portfolio, told Financial Express Online. But now platform-based companies like Zomato, which are still not profitable, are seeing correction as there is correction in the overall market as well. The boom in tech based firms is now ending, just like it is in the global market for technology stocks, he added.
Last week, Zomato posted lukewarm third quarter results and reported a marginal 5% quarter-on-quarter increase in order volume and operating revenue. The sequential orders volume growth was lower than market expectations. Brokerages have a mixed view on the food-tech firm. Jefferies, Goldman and Edelweiss have maintained a Hold rating on Zomato but have cut its target price. Jefferies has set a price target of Rs 120 apiece, Goldman at Rs 160 apiece and Edelweiss has cut the price target to Rs 101 a piece.
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