Nykaa, Zomato, Paytm, and now Policy bazaar, the new generation of tech stocks make up a whooping majority of investor wealth loss in India, a new study finds.
What's happened: Paytm, Zomato, Nykaa, and Policybazaar all went public to great acclaim, and their stocks have received a lot of attention since then.
In 2022, however, they have lost more than 55% of their market capitalization (m-cap) from the combined m-cap of $20.16 Bn as against $45.18 Bn.
Consequently, shares of Paytm, Nykaa, and Policybazaar have been seeing extreme volatility, which is expected to continue over the coming days.
Backdrop: The Indian startup ecosystem matured in 2021 when funding skyrocketed and new-age tech startups debuted to widespread acclaim on stock exchanges.
In total, Indian tech startups raised more than $42 Bn+ across 1,583 deals as per data recorded by Inc42.
Global economic slowdown and market volatility have taken a toll on India's new-age technology stocks.
By the numbers: Stock and industry-specific issues such as regulatory uncertainty, deteriorating fundamentals, and profit concerns have all contributed to the four stocks share prices plummeting.
Foreign investors (FIIs) sold a large number of Paytm shares. Paytm was held by 127 FIIs prior to its IPO, and its lock-in period ends on November 18.
Policy Bazaar was the worst hit and dropped 72% since its IPO, even after narrowing its losses and beating revenue forecast in Q2 - shares didn't move much.
But: Data on the BSE showed that of the 64 companies that got listed in 2021, as many as 30, that is nearly half the total listings are in the red compared to their offer price.
Few reasons for the bear market are rising interest rates in the US, FII flows money to bonds with higher yields, changes in consumer habits, etc.
Bottom Line: With the lock-in expiry knocking at the door, new-age tech giant's stocks are at risk of sell-off which would in turn affect forex and investment within the nation.
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