The stock price of Indian food delivery firm Zomato plunged more than 14% to a record low on Monday, after a one-year share lock-in term for promoters, staff, and other investors expired following the 2021 IPO.
Zomato made a spectacular launch in the Mumbai market on July 23, 2021, but its shares have lost more than 60% of their value since then due to valuation worries and the collapse of global growth stocks.
“Investors are concerned about the sell-off through employees and promoters,” said Prashanth Tapse, vice president of research at Mehta Equities.
Investors are also uneasy about the acquisition of Blinkit, he said, adding that the company’s fundamentals remain strong.
Zomato shares have fallen over 30% since the business announced its acquisition of local grocery delivery startup Blinkit in June, including Monday’s losses.
On Monday, the stock experienced its largest intraday percentage decrease since January 24 in 2.7 times the 30-day average volume.
The corporation is currently worth 366 billion rupees ($4.58 billion), down from 1.29 trillion rupees at its all-time high in November.
Analysts believe Zomato should invest more in Blinkit as the quick-commerce market expands rapidly, with rivals Swiggy, Reliance Industries-backed Dunzo, Tata-backed BigBasket, and Zepto making significant investments.
Zomato is set to release its first-quarter earnings on August 1. In May, the company announced a 75% increase in fourth-quarter revenue, while gross order value – or the entire value of all food delivery orders placed on its web platform – increased 77% year on year to a record high. more info
According to Reuters, Domino’s Pizza’s India franchise will consider moving some of its business away from Zomato and Swiggy if their commissions continue to grow.