Retail investors nurse wounds of new-age tech stocks sell-off with memes

The drawdown in the technology companies in India has been driven by sell-off seen in technology and growth stocks in the US

The brutal sell-off in new-age technology companies over the past few sessions forced retail investors to cope with the losses in their portfolio with humour.

Shares of new-age technology startups like Paytm, PolicyBazaar, Nykaa, Zomato, CarTrade Tech and others that took the domestic stock market by storm last year with their initial public offering are now trading with 20-50 percent discount to their issue price.

The drawdown in the technology companies in India has been driven by sell-off seen in technology and growth stocks in the US. The surge in global bond yields has forced investors to trim their valuations of many of the high-growth, loss-making technology companies.

Many of these new-age tech IPOs had seen euphoric participation from retail investors with their allotted quota oversubscribing many times over. For example, the retail quota in Zomato’s IPO in July 2021 was subscribed eight times. In Nykaa’s case, the same quota was subscribed 12.2 times.

With retail investors sinking a lot of their money in many of these new-age tech stock, they took to micro-blogging site Twitter to express their grief in the best manner they do: memes.

#Paytm investors these days pic.twitter.com/GR9CFS1NZt

— הרץ במבוך (@mazerunner2016) January 24, 2022

IPO LISTING VS AFTER 3 MONTHS #Zomato#Paytmpic.twitter.com/DSsgiIAIOP — AKSHAT KANWAR (@AKSHAT414) January 24, 2022

“Woke up feeling my life is a little down today, but Zomato, Paytm and Nykaa beat me to it,” said Twitter user Twishaa Gupta in a tweet.

The sell-off in technology stocks in India and the US even drew a witty quip from the Chairman and Managing Director of Kotak Mahindra Bank Uday Kotak on Twitter.

The Economist gives new name to big 5 tech giants, MAAMA:Microsoft, Apple, Alphabet, Meta, Amazon. Anyone who understands colloquial Hindi knows there are 2 meanings of word “maama”. Wonder which meaning if any, is relevant here.वोह हमारे मामा है।या हम मामा बनेंगे!

— Uday Kotak (@udaykotak) January 24, 2022

“I don’t know what’s giving me more chills, Mumbai’s temperature or the stock market!” said Twitter user and investor Krunal Mehta.

Market participants suggested that many retail investors’ portfolios were exposed to stocks of the new-age tech companies given the growth narrative and hopes of a continuous uptrend.

Just ordered from zomato and paid through paytm to give moral support. #IPO#sharemarket — Vasim (@amdvasimakram) January 24, 2022

One portfolio manager, who manages retail portfolios through platforms like Small Case, told Moneycontrol that in December most retail portfolios he had scanned had up to 20-30 percent of their investments in tech IPO stocks.

“In my view, these stocks can fall another 50 percent and they will not be cheap,” Shankar Sharma, vice-chairman and joint managing director at FirstGlobal told CNBC-TV18 in an interview today.

With signs of an imminent recovery in shares of new-age technology companies bleak, retail investors only have hope to lean on going ahead.

“The Paytm stock price is giving me more jitters than my crypto portfolio. An IPO that I will forever regret in my life. Hope I get back my investment by 2030,” said KVS Prakash, founder of budget home improvement company Click2Fix on Twitter.

The @Paytm stock price is giving me more jitters than my crypto portfolio. An IPO that i will forever regret in my life. Hope i get back my investment by 2030.

— KVS Prakash (@prakashkalla) January 24, 2022