Falling share prices, poor financials: New-age tech companies and pain in MF portfolios
Shares of Delhivery, the Indian logistics and supply chain company, fell by 31 percent last week on the back of moderate growth outlook. Some other new-age companies, like PB Fintech, fell too. Some fund houses that had bought new-age technology companies’ shares in their initial public offerings (IPOs) are now faced with the dilemma of what to do with them: hold for long-term prospects or exit and cut losses. Here are the fund houses that are still holding on to their shares
Stocks of the new-age companies that were the darlings of many investors once have lost some sheen lately. Share price of many such companies more than halved in the past year. Unlike the asset-heavy traditional companies, these new-age companies bet on innovative business models that leverage technology to enhance their operations. Over the last two years, some players from the startup space went for initial public offerings (IPOs) and listed with substantial premiums (except Paytm and CarTrade Tech) on their debut on the bourses. Mutual funds, too, showed interest in a few of these companies, betting big on their future prospects even though these companies reported negative earnings numbers. “Their IPOs were aggressively priced due to valuation cues from Nasdaq and the greed of promoters and early investors. Primary market investors were also greedy to make money on listing. But soon euphoria in valuation waned and these stocks continued to fall due to poor visibility of revenue growth and margins,” says Deepak Jasani, head of retail research, HDFC Securities. Here is the list of new-age tech companies (as classified by Prime Database) that were listed after January 2021 where mutual funds pruned their exposure significantly over the period. Return value (%) for the stocks was as of October 25, 2022. Source: ACEMF
2/9
Easy Trip Planners Listing date: March 19, 2021 Listing day gain/loss (from offer price): 11% Industry: Tour, travel-related services Schemes that had notable exposure: Quant Active, Navi Large & Midcap and Navi ELSS Tax Saver Business profile: EaseMyTrip is an Indian online travel company founded in 2008. It provides hotel bookings, air tickets, holiday packages, bus bookings and white-label services
3/9
Nazara Technologies Listing date: March 30, 2021 Listing day gain/loss (from offer price): 43% Industry: Digital entertainment Schemes that had notable exposure: ICICI Pru Flexicap, Aditya Birla SL Small Cap and Motilal Oswal Dynamic Fund Business profile: Nazara Technologies is a leading India-based diversified gaming and sports media platform with a presence in India and across emerging and developed global markets. It offers interactive gaming, e-sports and gamified learning ecosystems
4/9
Zomato Listing date: July 23, 2021 Listing day gain/loss (from offer price): 66% Industry: E-retail/e-commerce Schemes that had notable exposure: Mirae Asset Emerging Bluechip, Nippon India Small Cap and Franklin India Flexi Cap Fund Business profile: Zomato is an Indian multinational restaurant aggregator and food delivery company. Launched in 2010, its technology platform connects customers, restaurant partners and delivery partners, serving their multiple needs
CarTrade Tech Listing date: August 20, 2021 Listing day gain/loss (from offer price): -7% Industry: E-retail/e-commerce Schemes that had notable exposure: ICICI Pru Technology, DSP Equity Opportunities and HDFC Large and Mid Cap Fund Business profile: Cartradetech.com is a multi-channel auto platform with coverage and presence across vehicle types and value-added services. Its platform operates under several brands: CarWale, CarTrade, Shriram Automall, BikeWale, CarTradeExchange, Adroit Auto and AutoBiz. Through these platforms, it enables customers, vehicle dealerships, vehicle OEMs and other businesses to buy and sell their vehicles
6/9
FSN E-Commerce Ventures Listing date: November 10, 2021 Listing day gain/loss (from offer price): 96% Industry: E-retail/e-commerce Schemes that had notable exposure: ICICI Pru Flexicap, UTI Flexi Cap and SBI Magnum Equity ESG Fund Business profile: Incorporated in 2012, Nykaa, the consumer technology platform operated by FSN, delivers a content-led, lifestyle retail experience to consumers. The company has a diverse portfolio of beauty, personal care and fashion products, including its own products
7/9
PB Fintech Listing date: November 15, 2021 Listing day gain/loss (from offer price): 23% Industry: Fintech Schemes that had notable exposure: Mirae Asset Emerging Bluechip, Invesco India Contra and Franklin India Prima Fund Business profile: PB Fintech is the leading online platform for insurance and lending products providing access to insurance, credit and other financial products. It is India’s largest online platform for insurance (PolicyBazaar) and lending (Paisabazaar) products leveraging the power of technology, data and innovation
8/9
One97 Communications Listing date: November 18, 2021 Listing day gain/loss (from offer price): -27% Industry: Fintech Schemes that had notable exposure: Mirae Asset Focused, Aditya Birla SL Frontline Equity and Mirae Asset Emerging Bluechip fund Business profile: One 97 Communications-owned Paytm is India's leading digital ecosystem for consumers and merchants. Paytm offers payment services, commerce and cloud services, and financial services to consumers
Delhivery Listing date: May 24, 2022 Listing day gain/loss (from offer price): 10% Industry: Logistics solution provider Schemes that had notable exposure: SBI Equity Hybrid, SBI Focused Equity and Mirae Asset Midcap Fund Business profile: Founded in 2011, Delhivery is a logistics and delivery company in India. It offers various services like heavy goods delivery, express parcel delivery, truckload freight, cross-border express, supply chain solutions, supply chain software and freight services. Disclaimer: Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
