However, the initial enthusiasm surrounding these stocks has waned, and most of them are currently trading below their IPO prices. Barring Zomato, the other stocks are yet to stage a recovery, continuing below their respective issue prices.
This divergence from the predicted market trajectory prompts a closer examination of the factors influencing the performance of these companies and the evolving dynamics within the contemporary tech stock landscape.
Here’s a breakdown of these stocks’ performance from their IPO prices:
Paytm
Paytm’s share price has seen a massive drop and is trading at all-time lows after the Reserve Bank of India (RBI) recently ordered Paytm Payments Bank to stop offering its key services after February 29, citing non-compliance and oversight concerns.
Paytm’s stock has crashed nearly 85% from its IPO price of ₹2,150 in November 2021 and has now hit a new low of ₹325.30.
The fresh blow on the share price came after One 97 Communications, the parent company of digital payments and financial services firm Paytm, confirmed receiving notices from the Enforcement Directorate (ED).
Read here: Paytm share price falls 5% to hit 52-week low as it confirms receiving ED notice
Earlier, global brokerage firm Macquarie downgraded its rating on the stock to “Underperform” and sharply cut the target price to ₹275 of ₹650 driven by a sharp reduction in revenues across various segments.
Post the recent regulatory changes and dictates, Paytm now faces a significant risk of customer churn that significantly jeopardizes its monetization as well as its business model, Macquarie said.
Fintech giant Paytm shares have plunged 48% in 2024, while the stock has fallen more than 64% in three months.
Zomato
Zomato’s share price has seen a decent rally and is nearing its all-time high on the back of improved financials and healthy business growth. The food aggregator reported the third straight profitable quarter during the period October-December 2023.
Zomato shares hit a 52-week high of ₹159.20 a piece on Thursday, gaining more than 109% from its IPO of ₹76 in July 2021. In the last three months, Zomato’s share price has risen over 30%, while it has grown over 211% in one year. Strong growth momentum in the segments, positive margin and leading market position supported the superior performance.
The company’s better Q3FY24 performance and growth was fueled by Blinkit, which rose 27% QoQ, while food delivery revenue grew 10% QoQ, driven by a higher take rate. This was partly driven by better ad monetization on the platform.
Its management maintained its long-term earnings growth guidance at 40% + YoY but increased it to 50% + YoY for the near term.
After turning positive at the margin level in Q3, Motilal Oswal Financial Services now estimates Zomato to deliver 4.5% and 10.0% EBITDA margin in FY25E and FY26E. It has a ‘Buy’ rating on the stock with a target of ₹170 per share.
Nykaa
Shares of FSN E-Commerce Ventures Ltd., the flagship company of beauty and personal care brand Nykaa, are trading below their IPO price. Nykaa’s stock is trading around ₹150, which is lower than the adjusted IPO price of ₹187.25. The price is adjusted to take into account the 5:1 bonus it announced in November 2022.
Nykaa made a strong stock market debut in 2021, listing at a premium of over 82% at ₹2,054 per share on the NSE as compared to its IPO issue price of ₹1,125 each
The beauty and fashion retailer reported a net profit of ₹16.2 crore in Q3FY24, an increase of 98% compared to ₹8.2 crore in the year-ago period, driven by strong demand during the festival and wedding seasons.
The company’s income from operations rose 22% to ₹1,789 crore from ₹1,462 crore in the year-ago period.
While there have been murmurs of increasing competition for Nykaa BPC, the company appears to have maintained, if not increased, its market share. Overall, the company reported 29% and 24% YoY GMV and NSV growth with EBITDA margin increasing 18 bps. Consolidated GMV for Q3FY24 was at ₹3,620 crores.
“This becomes particularly impressive given the tough discretionary environment as evidenced by the FMCG results. Growth in transactional customers as well as ordering frequency was slightly subdued with AOVs continuing at high levels,” JM Financial said. It reiterated a “Buy” call on the stock with a target price of ₹210 per share.
Read also: M&M stock price jumps 5% after Q3 earnings; is the stock worth buying?
The shares of PB Fintech, the parent company of Policy Bazaar and Paisa Bazaar, are still trading below their IPO price even after two years of listing.
The insurance and financial aggregator debuted on the stock exchanges on November 15, 2021, listing at a premium of 22.7% at ₹1,202 per against the issue price of ₹980.
PB Fintech shares hit a record low of ₹356 apiece in November 2022. However, the stock recovered and hit a 52-week high of ₹1,050 apiece on February 1, 2024.
In the last three months, PB Fintech’s stock has increased more than 22%, while it has increased by 88% in one year. On Thursday, the stock traded around ₹935 per on the BSE.
EaseMyTrip
EaseMyTrip stock has eroded significant value since its listing in March 2021. The stock is trading more than 73% lower than its IPO price.
Easy Trip Planners Ltd, the parent company of online travel aggregator platform EaseMyTrip, made its debut in March 2021 at ₹212.25, 13.5% higher than the IPO issue price of ₹186-187 per share.
The stock hit a 52-week high of ₹54 on February 8, 2024, and a 52-week low of ₹37.01 on October 26, 2023. EaseMyTrip shares have gained over 17% in the last three months and over 22% YTD.
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Published: 15 Feb 2024, 12:07 IST