PremiumLogistics unicorn Delhivery’s shares plummeted by over 15% to ₹473.50 on Thursday, following its latest guidance on moderate growth in shipment volumes through the rest of the financial year.
The company’s stock price breached its initial public offering (IPO) issue price of ₹487 per share for the second time since the Gurugram-based startup debuted on the stock exchange.
In its quarterly business update to its shareholders, Delhivery shared concerns over “high levels of inflation, with average user spends and total active shoppers remaining flat or lower during the ongoing festive season".
It further added that volumes in our supply chain services and Truckload (TL) businesses declined quarter-over-quarter in the three months ended September 30, 2022, due to “expected effects of seasonality" in its customers’ businesses.
Delhivery, the largest fully-integrated logistics services player in India, had raised ₹5,235 crore in its IPO in May. The issue was oversubscribed by subscribed 1.63 times. It is listed on National Stock Exchange with a premium of 2% with a price of ₹495.2.
The company’s shares have since fallen 11.8% since then. It said it remains watchful of the market sentiment.
Other tech stocks- including Paytm, Zomato, Nykaa, PB Fintech–which went public last year, have also had a tough week so far on the stock market. The shares of most of these companies have fallen even as benchmark indices Nifty and Sensex gained.
While shares of Paytm, Zomato and PB Fintech have already fallen below issue price, Nykaa is trading dangerously closer to the issue price.
The share price of FSN E-Commerce Ventures Ltd., which operates beauty and fashion marketplace Nykaa, hit the lowest point of ₹1130.85 since it started trading in November. Its shares traded slightly higher than the issue price of ₹1125, ahead of the November 10 expiry of the one-year lock-in period for its pre-IPO shareholders.
However, on Thursday the stock moved up by 0.85% to end the day at ₹1162.10 apiece, offering a sigh of relief to investors.
Overall, Nykaa’s stock price has fallen by more than 36% in the last six months, and 4.8% in the last five days of trading. The stock is down 54.8% from its all-time high of ₹2,573.70.
Nykaa made a strong market debut last year in October when the company’s stock was listed with a 79% premium on the issue price at Rs. 2,001 per share on the Bombay Stock Exchange (BSE).
For the first quarter of financial year 2023, Nykaa reported a net profit of ₹4.5 crore, up 32.4% over the corresponding period last year. On the other hand, the company’s revenue grew 40.6% year-on-year to ₹1,148.4 crore.
“...we believe success will not be easy as Nykaa is not the cheapest place for beauty and personal care products and neither does Nykaa solve authenticity issue here," ICICI Securities had said in its August 2022 note.
It also put “chasing growth at elevated levels can be dilutive of gross margin and success in fashion business can be difficult given higher competition in the category," as potential risks.