Swiggy, OLA, FirstCry & More: New-Age Tech Stocks Sink Below IPO Prices in Market Crash
It is believed that the Indian market is in a state of stress because Donald Trump tariff announcements have triggered investors to be cautious. New age tech stocks, like Zomato and Swiggy have experienced massive declines, which have eroded the market crash value and trading at or below IPO prices.
Swiggy, OLA, FirstCry & More: New-Age Tech Stocks Sink Below IPO Prices in Market Crash
Indian stock market of the new age, popular for their high valuations, are now less appealing to investors, as the risk-off sentiment increases due to global uncertainties following Donald Trump's tariffs on Canada and Mexico announcement that could lead to the start of a new trade war.
The entire new age tech stocks has been in a state of extreme stress over the past few months, and has been weakening to a lesser extent in February bringing stocks to lows for the entire month and degrading the value of their markets and new technology being the same.
The downturn has also brought many stocks in stock market today, such as Swiggy share price, OLA, Honasa Consumer, Unicommerce eSolutions, and Brainbees Solutions (FirstCry), lower than their IPO prices.
New-age tech stocks crumble under selloff pressure
The once fast-moving Zomato stock price, which enjoyed an uptrend in one direction between March 2023 until December 2024, is currently suffering a severe beating by Dalal Street investors, leading to a correction of 21% in January. At present, the stock currently trades for Rs222.
Despite the steep decline however, the stock is trading at a price-to-earnings-ratio that is 323x. The stock's competitor, Swiggy, has faced greater pain, and has slid 47% from its previous peak and trades in the range of Rs326.30 for each share.
The stocks also came under scrutiny due to the increasing competition in the rapid commerce sector. In the near future, these companies will have to compete with a new competitor on exchanges, since the Indian company BigBasket is expected to go public over the next 18-24 months. In addition, the weak December quarter profits and increasing expenses in the Q-Commerce area also hurt the investors' mood.
No relief in sight
As India struggles with its own challenges to growth the Trump's string of tariff hikes announcements has shaken investors' confidence, which has triggered global tensions. The Indian market is being hit harder since valuations remain overvalued compared to their global counterparts.
