Shares of Zomato, Paytm, Nykaa touched their lowest level, what should the investors investing in them do now?

Shares of most of the new age business companies like Zomato, Paytm and Nyaka are trading at their all time low levels. The price of shares of many companies has come down even below their listing price or their IPO issue price. Shares of online food delivery company Zomato have also fallen below its issue price of Rs 76. On the other hand, the shares of Paytm have not been able to reach even near the issue price since its listing and it is continuously declining.

Santosh Meena, Head of Research, Swastika Investmart, said, “We all knew that all these companies have come at very expensive valuations in the midst of a boom in the market and some of them will stay ahead. Zomato and Star Health are present here. Looks attractive at levels that have potential to create wealth for investors in the long term. Nyakaa is also a profit making company and it can also be a part of investors’ portfolio. However if you talk about Paytm, it is now Also, there is no clarity on its business outlook and the time frame for it to turn profitable.”

The US Federal Reserve Bank has indicated to raise interest rates. As a result, investors across the world are drawing money from stocks with higher risk and valuations. New-age tech companies, especially those that are not yet profitable, are seeing huge sell-offs. Analysts say that this trend may continue for some more time.

Also read- Tata Power up about 3%, Morgan Stanley raises the target price of the stock

Prashant Tapsi, Vice President (Research), Mehta Equities Ltd. said, “Some of the recently listed new-age business stocks are witnessing heavy selling pressure. There are domestic as well as global factors behind this. The fall in the shares comes after a weak Gross Order Value (GOV) in the third quarter. Zomato’s outlook in Q4 also looks similar, so we are neutral on it. However, if there is some improvement in the global market conditions , then we may see it trading in the range of Rs 80 to 92 in near future.”

Similarly, shares of Star Health have fallen 14 per cent in the past one month and have fallen below both its issue price and listing price.

Divam Sharma, founder of Green Portfolio, a SEBI-registered firm that provides portfolio management services, said, “The Star Health IPO was priced aggressively. The rise was accompanied by stiff competition.Investors should wait for the return of profits in its quarterly results before making fresh purchases in the stock.Its valuation is now compared to the price-to-book value of its peers. Looks expensive too.”

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