Nykaa, Delivery continue to bleed, other new-age tech stocks see turbulent week

Shares in Nykaa and Delivery slumped 13% and 7.8% on BSE after three straight sessions of losses

Tracxn shares fell 16.6% this week to close at Rs 76.1 after market debut last week

Zomato, Paytm and Fino Payments Bank were the new-age tech stocks that closed the week in the green

New-age tech stocks in India continued to be under pressure this week, despite a bullish trend in the broader stock market. Newly-listed Tracxn Technologies, CarTrade Technologies and every IPO investor in Nykaa and Delhi, whose lock-up periods will end next month, have been hit the hardest among new-age tech stocks.

Shares in Nykaa and Delivery on the BSE fell 13% and 7.8%, respectively, for the week after three straight sessions of losses. Both stocks have come under severe selling pressure and hit record lows since last week. On Friday, Nykaa touched an all-time low of Rs 975.5 on the BSE, while Delhi touched Rs 350.05.

In fact, these stocks were the two biggest losers in the Nifty 500 this month.

Policybazaar’s parent company, PB Fintech, was also among the top 10 losers in this month’s Nifty 500. The insurtech startup’s stock lockup also ended in November, having seen extreme volatility over the past few weeks. After hitting an all-time low last week, shares of Policybazaar regained some momentum this week, closing more than 3 percent higher at Rs 393.6 on the BSE on Friday. For the week, shares rose nearly 4%.

On the other hand, Tracxn has continued to face tough times since its IPO due to the negative sentiment surrounding new-age tech stocks. Tracxn shares fell 16.6% for the week after their market debut last week. The stock closed at 76.1 rupees on Friday, about 5 percent below its IPO price of 80 rupees.

However, Zomato, Paytm and Fino Payments Bank closed the week in green. Paytm and Fino Payment Bank’s share lock-up period is also set to expire next month.

The week also saw a special one-hour Muhurat trading session on the day of Diwali on Monday. In line with the positive sentiment in the broader stock market, most new-age tech stocks ended the special session in the green.

Indian stocks also showed Optimism this week, despite unfavourable global sentiment. Benchmark indices NSE Nifty50 and BSE Sensex rose 1.2% and 1.1% respectively for the week to close at 17,786.8 and 59,959.85 on Friday.

The Stock Exchange of India was closed on Wednesday (Oct 26) on the occasion of the Diwali festival Balipratipada.

Now, let’s take a deeper look at the weekly performance of some listed new-age tech stocks from India’s startup ecosystem.

Nykaa, Delivery continue to bleed, other new-age tech stocks see turbulent week

The 12 new-age tech stocks have a combined market capitalization of $27.19 billion, up from $27.62 billion last week.

Nykaa, Delivery continue to bleed, other new-age tech stocks see turbulent week

Nykaa keeps fighting

Nykaa continued to come under pressure for the second week in a row ahead of the Nov. 10 expiration of the stock’s lockup period. Although shares rose slightly during Monday’s Muhurat session, they continued to fall over the next three sessions, putting them more than 12 percent below the IPO price of Rs 1,125.

Nykaa is currently trading at Rs 983.15, nearly 60% below its BSE debut price.

While much has been said about analysts’ split over Nykaa’s fortunes and growing market competition, some analysts remain hopeful for the stock in the long run. However, the current situation has created a sense of uncertainty even among market analysts.

Nykaa stock is already at a 52-week low and a small rebound is expected, Kunal Shah, senior technical analyst at LKP Securities, said in an interview with Inc42 earlier this week.

Amol Athawale, vice president of technical research at Kotak Securities, made similar remarks as the stock fell further this week. “The stock has been facing selling pressure at higher levels. The pattern is weak, but if the share price manages to break above Rs 1,030, a quick correction is possible,” he said.

He believes that even if there is a pullback, it could continue to Rs 1,060-1,080.

Athawale also noted that this will create additional pressure as the share price has fallen below Rs 1,000. On the downside, the immediate support would be Rs 975-970, he added.

Nykaa keeps fighting

Delhivery shares down nearly 40% in a month

Shares in Delivery have been rising in the first few months after going public earlier this year. Its market capitalization rose above INR 50,000 in July, making it one of the top 100 companies by market capitalization. However, in just two months, the market capitalization of Delivery has almost halved and is currently at Rs 25,890.7.

Investors appear concerned about the startup’s business performance. The stock was hit hard for the first time after Drifrey reported its consolidated net loss widened 208% to Rs 399.3 rupees in the first quarter of fiscal 2023 and its PTL (partial truck loading) business slowed.

Second, the startup issued a silent second-quarter operational update, saying that its PTL business had begun to recover, but that volumes in its supply chain services and trucking operations fell during the quarter.

Investors haven’t forgotten the fact that a slowdown in e-commerce spending due to inflationary pressures will hit Drifley’s business. Additionally, the stock’s lock-up period expires on Nov. 24, creating further pressure for pre-IPO investors in Delhivery to sell off further.

Despite selling pressure on Delhivery shares, which fell nearly 4% on Friday alone to close at INR 356.45 on the last trading day of the week, Kotak Institutional Equities upgraded the stock to “overweight” from “underweight” this week.

Although the brokerage lowered the fair value of its shares to Rs 415 from Rs 540 earlier, it said Delivery is operationally and strategically well positioned to withstand any near-term weakness in industry growth.

In an interview with Inc42, independent market expert Manish Shah said Delhivery’s share price could rebound after the lock-up period.

“Oscillators are showing deep oversold and if we apply the measurement technique price then we would see support between Rs 300 and Rs 290,” Shah said. “A price drop of this magnitude is unsustainable as prices will return to average levels.”

Meanwhile, Kotak Securities’ Athawale expects the downtrend to continue. “Rs 400 would be immediate resistance. On the downside, INR 325-315 is also possible,” he added.

Delhivery shares down nearly 40% in a month

MapmyIndia publishes mute results

Shares of Crypto mapping startup MapmyIndia fell 3.4% to Rs 1,310 on the BSE on Friday, a day after the company reported almost flat profit for the second quarter of FY23. However, the stock recovered some of its losses during the session to close at Rs 1,315.50.

The startup reported a quarterly profit of Rs 25.37 compared to Rs 25.39 in the corresponding quarter of FY22, despite a 34.6% year-on-year increase in operating income to Rs 76.31 in the September quarter.

The startup’s investments in the quarter resulted in a flat net profit compared to the same period last year. From a strategic investment in KOGO, to the acquisition of Gtropy, to launching a panoramic, 3D experience with Mappls to compete with Google Street View, MapmyIndia made several investments during the quarter.

MapmyIndia said in a statement that it invests responsibly, “with an eye toward the future, balancing the short- and long-term goals of growth and earnings”.

MapmyIndia shares have historically performed well compared to other new-age tech stocks, but there have been some concerns recently after Google Maps launched its Street View service in India.

“The stock is witnessing non-directional activity. Maybe traders are waiting for confirmation of a breakout from both sides, I think,” Athawale said.

Currently, the stock is seeing non-directional activity around the 50-day and 20-day moving averages with a lower bound of around Rs 1,300 and an upper bound of around Rs 1,380, he said.

According to Athawale, the stock could reach the Rs 1,420 level in the medium term if it breaks the Rs 1,380 level.

However, selling pressure may increase below Rs 1,300. He added that if the stock closes below Rs 1,300, it could also drop to Rs 1,260 and Rs 1,240 in the near future.

At current levels, MapmyIndia is more than 16% below its BSE debut price of Rs 1,581.

MapmyIndia publishes mute results

Source of information: Compiled from INC42 by 0x Information.The copyright belongs to the author, Tapanjana Rudra, and may not be reproduced without permission

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