Zomato stock fell for the second year in a row today after the company’s anchor investor lock-up period came to an end. Zomato’s stake fell as much as 5.03% to Rs 120.60 from the previous closing price of Rs 127 on BSE.
A total of 31.91 lakh shares changed hands for a turnover of Rs 39.57 crore.
Later the stock closed 1.46% lower at Rs 125.15.
The grocer’s market capitalization fell to Rs 98.182 billion due to BSE.
On Monday, the stock fell up to 10% on the day to Rs 124.75 from its previous closing price of Rs 139.30.
Zomato made its market debut on July 23, 2021. The Zomato share is quoted at a premium of over 52% on the IPO issue price. Zomato shares opened at Rs 116, 52.63% higher on the NSE from the issue price of Rs 76. The company’s market cap exceeded Rs 1 lakh crore on the trading day.
The IPO shares were offered in a price range of Rs 72-76. The company raised Rs 9,375 billion through its IPO. The edition was open from July 14th to July 16th.
Anchor investors buy a large number of shares in a company the day before it goes public. These are large institutional investors such as investment funds or sovereign wealth funds.
You have a 30-day vesting period after allocation. This means that they cannot sell their shares until 30 days from the grant date.
ICICI Securities bought Zomato with a price target of Rs 220.
“Due to the strong tailwind of demand, which is covered in detail in the food tech sector – (Link) the brokerage expects CAGR sales of 46% / 33% of the global technology sector (e.g. Amazon Since the post-tax growth / profit margins are not yet stable, the price-earnings ratio (PEG) is better than the price-earnings ratio for relative comparisons. With 0.5x FY24E PEG, Zomato is a lot Cheaper compared to average food services (1.9x), technology (1.8x), or consumer stocks (2.9x), “the broker said.
“The end of the one-month lock-in period for anchor investors combined with problems in US operations have resulted in a significant correction in Zomato stock. Technically, Zomato still looks weak on the charts and a daily close below Rs 120 could trigger it . ” another correction up to Rs 104 in the near future. 131 will be a strong resistance, “said AR Ramachandran, Co-Founder and Trainer of Tips2Trades.
Last week, the company announced that it had liquidated and wound up its secluded U.S. subsidiary a month after the grocery delivery company was listed on the Indian stock exchanges.
Zomato USA is not a material subsidiary of the company and has no business activity and its liquidation will not affect the company’s sales / earnings, she added.