India saw a number of popular new-age stocks launch IPOs in the last couple of years. Despite much fanfare and sky-high valuations, many of these companies have since disappointed, and in many cases, they wiped out significant amounts in investor wealth.
Most of these stocks had listed during the COVID-19 pandemic, when interest rates were low and cash was more easily available. Things have changed since then and IPOs in the country have slowed amid global economic slowdown and a so-called funding winter.
That said, a number of Indian companies are returning to public markets as the economic outlook brightens to a degree. IdeaForge, India’s top drone maker, is currently accepting bids for its IPO while Tata Technologies is set to become the Tata Group’s first IPO in nearly two decades.
In this article, Benzinga India looks at how nine new-age tech companies have performed since going public. These include Paytm, CarTrade, Policybazaar, Delhivery, Nykaa, Zomato, Easemytrip, Nazara Tech and MapmyIndia.
IPO Price Vs. Share Price
Most of the new-age tech stocks are still struggling to get back to their issue prices, which means that the market likely saw their IPOs as overvalued to begin with.
Adjusting for stock splits and bonus issues, Paytm is the biggest laggard in terms of the difference between its IPO price and its current market price. The fintech stock would have to go up 153% to match its issue price. CarTrade is the second-worst performer, followed by Policybazaar. Delhivery, which debuted in 2022 is off its issue price by around ₹100 per share.
Get Ring The Bell, Benzinga India’s weekly briefing. Designed specifically for investors like you.
On the Flipside, MapmyIndia has been the best performer so far in absolute terms, delivering returns of nearly ₹200 per share to investors over its issue price. Besides the digital map data firm, only Nazara Tech and Easemytrip have delivered positive returns to shareholders.
Cool Tech, Big Returns?
Easemytrip has delivered the biggest returns in percentage terms, more than tripling shareholders’ investments since listing on Mar 19, 2021. Given the sharp rise in its share price, the firm has conducted two bonus issues and a stock split to make its shares more affordable.
CarTrade has been the worst performer in percentage terms, giving shareholders who bought its shares at IPO issue negative returns of 70%. That means the stock is worth less than a third of what it was issued for.
Zomato is the closest to breaking even in terms of percentage returns, while Nykaa has cost shareholders 21% over their initial investment in its 2021 IPO.
How Has 2023 Been For New-Age Tech Stocks?
All nine stocks went public towards the middle or end of 2021, except Delhivery, which listed in 2022. While 2021 was a strong year for stocks, with the NIFTY 50 Index gaining 24%, 2022 saw the index gain just 4.32%.
So far this year, the NIFTY 50 is up 5.2%, with signs of a promising second-half of the year as both the Sensex and Nifty are near record highs. However, the NIFTY IT index, which tracks the performance of India’s major IT companies has only risen 0.8%.
In that respect, most new-age tech stocks have beaten the returns of the IT index this year, with Paytm and Policybazaar being the best performers. Zomato, MapmyIndia, Delhivery and Nazara Tech have delivered positive returns, while CarTrade has traded flat.
Meanwhile, Nykaa and Easemytrip have underperformed the IT index and lost investors money so far this year.
© 2023 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.