Investors Lost Rs 1.4 Lakh Crore After Buying ‘Hyped’ IPOs Of Paytm, Nykaa, Zomato, PolicyBazaar, Delhivery

Five of India’s super hyped technology IPOs over the past 16 months have been limping since listing, shedding more than $18 billion in value.

Tough times for Indian startups

Paytm has suffered from questions over valuations and rising global rates.

Other victims include delivery startup Zomato, the owner of beauty e-retailer Nykaa, logistics firm Delhivery and the operator of online insurance marketplace Policybazaar.

Last year was a bountiful one, Indian IPOs raised a record $18 billion along with government efforts to foster startups combined with easy-money policy and a surge in retail trading during the pandemic.

The picture today 

But that was then.

Investors have since dumped high-profile tech shares, even as the broader Indian stock market has outperformed global peers and scaled new peaks.

Arun Malhotra, a portfolio manager with CapGrow Capital Advisors LLP observed, “Valuations of these companies were not supported by fundamentals and the balance sheets, and their cash burn was high.

As large investors curtail their holdings, unlocked shares are adding to supply and this is accelerating the price declines”.

Paytm amongst biggest losers

Paytm parent One 97 Communications Ltd suffered a huge dive, as much as 10% Thursday after early investor SoftBank Group Corp. lowered its stake following the end of its IPO lock-up period.

Uber Technologies Inc., an early investor in Zomato Ltd., similarly exited the online food-delivery firm in August.

“New investors should not bottom fish in these stocks if the company has no clear path to profitability,” said Abhay Agarwal, a fund manager at Piper Serica Advisors Pvt.