Zomato shares tank 20% to new low, down 40% in 5 sessions: What's causing the fall? Expert decodes
Shares of Zomato continued their downwards slide as the shares of the food aggregator decline nearly 20 per cent to hit fresh 52-week low of Rs 91.70 per share in Monday's intraday trade on the BSE.
Shares of Zomato continued their downwards slide as the shares of the food aggregator decline nearly 20 per cent to hit fresh 52-week low of Rs 91.70 per share in Monday's intraday trade on the BSE. Zomato has corrected nearly 40% or Rs 30 in the last 5 trading sessions on the NSE
Shares of Zomato slipped even below lows created on their listing day. Expert is of the view that this correction is leading the food aggregator's share to a reasonable valuation as many new edge companies were listed recently on inflated valuations.
Shares of food delivery firm Zomato Ltd opened at a 52.6% premium to their initial public offering price in July.
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At 10.25 am, Zomato stock was trading with Rs 20 decline or 17.58% loss to Rs 93.75 apiece on the BSE on Monday.
"Zomato has been witnessing a vertical fall and slipped below the low made on a listing day which is not a good sign for any counter. There is a risk-off situation across the globe amid fear of tightening by the US Fed, where if we look at the trend then there is a sharp sell-off in growth stocks (new edge businesses), especially loss-making companies," Santosh Meena, Head of Research, Swastika Investmart Ltd said.
He said many new-edge companies came out with unrealistic valuations amid euphoria in the market, but we know that only a few companies will survive in the long run. "I believe Zomato has the potential to perform in the long run. The recent price correction is leading to stock at a reasonable valuation, where aggressive investors can use this correction as a buying opportunity with a long-term view." He added.
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10:51 AM IST