Swiggy, OLA to Honasa Consumer: 13 new-age tech stocks crash 30-64% from peak amid carnage in Indian stock market

Indian Stock Market: The recent sell-off in the Indian stock market has spared no one, including the new-age tech stocks, dragging many to multi-month lows as investor sentiment remains fragile amid global uncertainties. Fears of an uptick in global inflation and slower economic growth are mounting after US President Donald Trump officially ignited a trade war by imposing tariffs on major trading partners in a move to safeguard American industries.

Investors are also concerned that affected countries may take countermeasures against Trump’s actions, which could potentially escalate into a global trade war that could adversely impact emerging markets, including India.

Global inflation has been moderating in recent years due to a cooldown in prices, allowing central banks worldwide to focus on growth by cutting borrowing costs. However, if trade tensions heighten further, they may prompt central banks to pause the rate-cut cycle.

This heightened uncertainty has added another layer of concern to the Indian markets, which were already under pressure from weak earnings, slowing economic growth, and subdued government spending, prompting investors to accelerate their selling, leaving equities without support.

The Indian benchmark indices have ended lower in the last five trading sessions, with limited buying interest from investors. Along with foreign portfolio investors (FPIs), selling pressure was also visible in the retail and high-net-worth individual (HNI) segments, as experts suggest margin calls have been triggered due to the steady decline in stock prices.

Amid concerns over Trump’s actions, the U.S. Federal Reserve also paused the rate-cut cycle in its January meeting, which boosted U.S. bond yields and strengthened the U.S. dollar, making U.S. assets more appealing to global investors.

Meanwhile, the sustained decline in Indian markets has not made valuations attractive, according to market experts, particularly in mid- and small-cap stocks, where valuations remain stretched.

Stocks in the mid- and small-cap segments have been falling relentlessly since October, causing retail investors’ portfolios to bleed. These segments had seen a one-way rally after the COVID-19 pandemic, but a slowdown in earnings has prompted investors to exit the space.

New-age tech stocks, on the hand, which command high multiples and attract strong enthusiasm from retail participants during bidding, are also seeing their stocks decline sharply in the recent crash, falling below their issue prices.

Notably, retail investors are bearing significant losses in the downturn, as they hold a majority stake in these new-age tech firms.

Deep fall in new age tech stocks

Shares of Ola Electric Mobility touched a fresh 52-week low in today’s session, hitting ₹63.3 apiece. From its December highs, the stock is down 40%. Currently, it is trading 15% below its IPO price of ₹76. 

Likewise, Swiggy is also trading 13.6% below its IPO price of ₹390 apiece. The stock has corrected 45% from its recent high of ₹617.30 apiece to trade at ₹334.90 apiece. Its direct competitor, Zomato, has also slipped 30.21% from its recent highs, as both stocks came under significant selling pressure following the release of their December performance, which indicates rising competition in the quick commerce space.

Paytm and PB Fintech have also seen their stocks decline by 40% and 28% from their recent peaks, while Delhivery and the recent entrant Brainbees Solutions have suffered even larger cuts, both down by 44%.

Other latest entrants, such as Go Digit General Insurance, Unicommerce eSolutions, One Mobikwik Systems, Honasa Consumer, and Awfis Space Solutions, are down up to 64%.

Looking ahead, analysts said the decline in some stocks could persist, as they were listed at a hefty valuation premium. Despite the recent correction, valuations for most of these stocks remain stretched, they said. 

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.