After the lock-in period expired for pre-IPO investors, new-age internet companies are in focus. Since the end of the lock-in, investors have been diluting their stake in these counters.
On November 17th, Softbank sold 29 million shares of Paytm through a block deal. In a bulk deal, BSE data shows that Lighthouse India Fund III sold three crore FSN E-Commerce Ventures Nykaa worth Rs 525.39 crore.
According to some reports, Lighthouse is expected to sell a stake in Nykaa worth Rs 320 crore via a block deal.
The one-year lock-in period for Nykaa pre-IPO shareholders got expired on November 10, 2022, and the scrip turned ex-bonus the same day.
Paytm, Nykaa shares on a rollercoaster ride! Where are they headed?
The shares of Zomato took a beating after Mohit Gupta resigned from the company. The company is letting go of around 3 per cent of the workforce in the latest episode of layoffs. Various departments have been affected by the layoffs.
Read more: Zomato layoffs: employees across departments fired, co-founder also quits.
The lock-in period of Delhivery ended on Monday. In Delhivery, CA Swift Investments dumped half of its holdings at an average price of Rs 330.02 apiece, NSE bulk deal data suggested.
In another bulk deal, Morgan Stanley Asia Singapore bought 48,54, 607 48.52 lakh Delhivery shares at an average price of Rs 330 apiece.
When the tide turns, the appetite for high growth unprofitable companies falls and investments go back to safe value stocks. If you talk to the significant startup and PE voices, they talk about funding for winter approaching and continuing in 2023, and that there is a shift in private investors asking for profitability. Divam Sharma, founder of Green Portfolio, told Business Today that the thought process will sync with the listed markets.
We are seeing deferment in most of the approved DRHP IPOs of similar loss-making tech companies considering the macro environment challenges. Companies like Pharmeasy have dropped IPO plans, its shares in unlisted markets have fallen from 140 to 30 and are not able to find any takers and have been finding it hard to raise capital through rights issues, he said.
Key PE and anchors dumping the stocks of Paytm, Nykaa and Paytm are also a concern. We believe these stocks will follow trends from Nasdaq. We believe that maintaining high growth and profitability will be tough for these companies going forward. On the regulators side, we are seeing regulations around influencers, data protection, etc., which will keep on impacting these businesses, Sharma said.
He said that there are many companies in the private markets in various tech-based businesses that are profitable and available for secondary at very lucrative valuations.
If you look at Paytm or Zomato, the companies have seen the exit of senior executives who have created large value through the listing and many of them perusing their entrepreneurial journey. There could be trading bounces but investors should stay away from these new age companies that are trying to juggle growth and profitability in the near term, he said.
Over 50 per cent of the shares of Paytm, Nykaa, Delhivery, and Zomato have fallen from their all-time high.