In line with their disappointing performance in the previous year, new-age tech stocks such as Nykaa, Paytm, Zomato, and PB Fintech began 2023 on a weak note. These stocks witnessed intense selling pressure after their lock-in period for pre-IPO investors expired last year.
During Wednesday's trade, shares of FSN E-Commerce Ventures, the parent company of Nykaa, plummeted 7.46 percent to hit an all-time low of ₹123.35 apiece. In just one week alone, the stock has lost about 16.64 percent of its value.
The stock began to fall sharply as pre-IPO investors began selling their holdings in the company after the lock-in period expired on November 9, 2022. Since then, the stock has fallen by 31.62 percent.
The stock offered bonus shares shortly after the lock-in period expired to retain investors; however, this move did not improve investors' confidence in the company.
Adding to the challenges, chief financial officer Arvind Agarwal resigned from the post in November. Agarwal had joined Nykaa after working with Amazon in July 2020 and is among the key managerial personnel (KMP) who handled the initial public offering of the firm.
Similarly, shares of One97 Communications, Paytm's parent company, fell 8 percent in a week, falling from ₹579.15 apiece to ₹532.45. On January 12, the stock fell nearly 4 percent after Alibaba Singapore E-Commerce divested almost a 3 percent stake in the company for Rs. 1,031 crore through an open market transaction, according to stock exchange data.
Post the latest transaction, Alibaba's total shareholding has decreased to 28.19 percent from 31.14 percent.
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Since the lock-in period for the firm expired on November 15 for the pre-IPO investors, Paytm's stock has corrected by 15 percent to date. The stock was the worst performer on the Nifty 100 index during 2022, losing 60.14 percent of its value, declining rapidly from Rs. 1,334 apiece to Rs. 528.
On December 13, 2022, the Board of Directors of Paytm approved the proposal for the buyback of shares at Rs. 810 per share. However, the buyback plan failed to cheer investors' confidence.
At the buyback price of Rs. 810 apiece, investors who purchased shares in the IPO for Rs. 2,150 each and stayed invested are seeing their wealth decline by 75.25 percent. Notably, since its listing, the stock has never traded above its issue price.
Zomato lost nearly 6 percent in the last week alone. The stock saw its downward trend after the company's co-founder and chief technology officer, Gunjan Patidar, resigned from his post on January 02.
In November last year, another co-founder of the company, Mohit Gupta, resigned. Zomato witnessed some top-level exits in 2022 with Rahul Ganjoo, who was head of new initiatives, Siddharth Jhawar, the erstwhile vice president and head of Intercity, and co-founder Gaurav Gupta resigning.
On November 30, Alipay Singapore, an arm of Chinese e-commerce giant Alibaba, sold a 3.07 percent stake in the firm for ₹1,631 crore through an open market transaction.
Meanwhile, over the last one year, the stock has eroded investors' wealth by 60.73 percent, tumbling from ₹129.90 apiece to the current price of ₹51.
Further, shares of PB Fintech, the parent company of Policy Bazaar and Paisa Bazaar, have also fallen 5.61 percent in a week. The stock of insurance and financial aggregators has crashed by nearly 57 percent in a year.
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