Bad Days Ahead For Nykaa, Paytm, Policybazar, Zomato Share Price

Bad Days Ahead For Nykaa, Paytm, Policybazar, Zomato Share Price as $14 billion worth of locked-in shares in these newly listed tech companies will be available to be sold in the market due to expiry of the Lock-in period.

What is Lock-in Period in Stocks?

SEBI defines the rules for Lock-in period for new IPO listing to the Indian stock market. As per existing rules in India required a 1-year lock-in period for pre-IPO investors when these companies got listed. That lock-in for at least 11 companies ends in the next few days, and hence it is feared that leading investors will dump all or part of their holdings in the market. Leading investors, the likes of Warren Buffet and Masayoshi Son, who had made pre-IPO bets in these companies, are expected to exit or sell part of their holdings as reported by the various media sources.

Also – Learn Stop-Loss trading in Share & Stocks Market

Who could sell the stake? 

Paytm: Paytm has lost more than 70% of its value since its IPO, which was backed by global investors including SoftBank Group Corp, Warren Buffett’s Berkshire Hathaway Inc. and Jack Ma’s Ant Group. Analysts say that the stock may come under pressure after Nov. 15, as $4.3 billion worth of shares get unlocked, giving the investors an exit route.

Policybazaar & Delhivery: Interestingly Policybazaar has lost nearly 60% stake in the year so far, while Delhivery is down 27%. Softbank was an early investor in Delhivery and PolicyBazaar owner PB Fintech as well. 

The share price of Paytm, listed under the name One 97 Communications, is down 70 per cent from its IPO price. The company was backed by global investors including Son’s SoftBank Group Corp., Buffett’s Berkshire Hathaway Inc. and Jack Ma’s Ant Group Co.

Policybazar, or PB Fintech, is down 60 per cent from its IPO price.

Zomato is down 15 percent from its IPO price, and the stock has more than halved from its high of ₹169.

The share price of Nykaa or FSN E-commerce Ventures is hovering near its IPO price of ₹1,125 but has crashed badly from its high of ₹2,574.

The overall position of these stocks are not good for trading in the near future due to the rising interest rate environment. Given that the road to profitability for many of these companies remains uncertain, analysts say that the stocks could come under pressure once the lock-in period ends.  

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