New-age tech stocks fall despite broader market rally

The Indian stock market continued its march higher this week, with benchmark indices hitting record highs. Despite this bullish run, investor sentiment towards new technology stocks suffered during the week. Eighteen of the 28 startups covered by Inc42’s analysis fell between a little under 1% and under 7% this week.

Recently listed travel tech startup ixigo witnessed the biggest decline this week with its shares falling 6.99% to INR 144.75 Cr. Unicommerce, FirstCry, Awfis, Go Digit were some of the stocks that ended the week on a down note. Shares of gaming major Nazara also fell 1.55% to end the week at INR 1034.10 Cr despite an acquisition spree and plans to raise INR 900 Cr in funding.

Meanwhile, 10 new tech stocks gained between just under 1% and over 8% this week. The top gainer this week was NSE Emerge-listed D2C brand Menhood, whose shares gained 8.51% to end the week at INR 137 crore. PB Fintech, Zomato, Paytm and RateGain were among the other gainers this week.

Amidst this, the Nifty 50 and Sensex touched their all-time highs on Thursday (September 19) and Friday (September 20). This was the third consecutive week when the indices tested new all-time highs. The Sensex ended the week 1.9% higher at 84,544.31, while the Nifty 50 rose 1.7% to end at 25,790.95.

The main driver of this rally was the US Federal Reserve’s mid-week interest rate cut. The US Federal Reserve lowered its interest rate by 50 basis points for the first time in almost four years.

Vishal Goenka, co-founder of IndiaBonds.com, noted that the Fed’s decision comes amid significant policy divergence among central banks around the world. Brazil’s central bank, for example, raised interest rates this week, and the Bank of Japan is also considering a similar move.

“India remains well insulated from global interest rate movements for now, with the massive growth in risk assets and projected economic growth keeping the inflationary engine of the economy going,” he said.

Hrishikesh Yedve, vice president, derivatives research, Asit C. Mehta Investment Intermediates, said the current uptrend is likely to continue and take the Nifty 50 index to 25,900-26,000 levels.

“On the positive side, 26,000 will act as an immediate hurdle for Nifty. On the other hand, 25,500 will act as an immediate support for Nifty, followed by support from 15-DEMA which is near 25,300 levels. As long as Nifty sustains above 25,600, a ‘buy on dips’ strategy is advisable for traders,” he said.

Amid the bull market, the IPO boom is also continuing in the Indian stock market. Food major Swiggy is expected to soon publicly file the DRHP for its mega IPO. It is said that we want to raise 1.4 billion dollars through an IPO. Its IPO is likely to comprise a fresh issue of equity shares worth INR 3,750 Cr (USD 450 million) and an offer for sale (OFS) component worth INR 6,664 Cr (approximately USD 799 million).

Commenting on IPO trends, Pantomath Capital Advisors said, “With 59 IPOs raising INR 63,862 Cr in 2024 and an average first day gain of 30%, well above the global average of 22%, the demand for Indian IPOs is clear. Both local and international investors are driving this momentum and all signs point to further growth and opportunities in the future.”

With that in mind, let’s take a closer look at how new-age tech stocks performed this week.

Despite the decline in share prices, the combined market capitalization of the 28 new technology stocks covered by Inc42’s analysis was about $85.49 billion at the end of this week, compared with $82.93 billion at the end of the previous week.

PB Fintech reaches new heights

Shares of the company that owns Policybazaar have seen a new surge the highest level of all time 1966 INR on September 20. The stock ended the week at INR 1934.70, up 6.67% from the previous week. The gain took PB Fintech’s market capitalization to over USD 10 billion, reaching USD 10.56 billion by the end of the week.

The rally comes two weeks after the startup released its annual report, in which its founders Yashish Dahiya and Alok Bansal said it would focus on improving the application process. PB Fintech also aims to increase the share of secured loans in its total disbursement to 50% by fiscal 2026 from the current 12%.

“Average is a terrible metric, especially in the risk category. We’re already working with partners to look at digitally acquired risk and how we can look at smaller and smaller customer segments to provide the right product. Similarly, the claims experience is as much about the insurer-side process as it is about the real-world experience in a repair shop or a hospital,” the founders said.

For the uninitiated, PB Fintech operates digital insurance marketplace Policybazaar, lending platform Paisabazaar and online financial products platform.

In the first quarter of the financial year 2024-25 (Q1 FY25), PB Fintech recorded consolidated net profit of INR 59.98 Cr compared to a loss of INR 11.9 Cr in the corresponding quarter a year earlier. This was the third consecutive quarter in which the Group posted a profit. Operating income increased by 51.8% to INR 1,010.5 Cr in Q1 FY25 from INR 665.6 Cr in the corresponding quarter a year earlier.

Zomato’s market capitalization exceeds $30 billion

Zomato also saw a new all-time high this week. The startup’s stock touched INR 292.90 crore on September 20 and ended the week at INR 290.70 crore. The stock is up 6.52% week-on-week.

As a result of the bull market, Zomato’s market capitalisation crossed the $30 billion mark and stood at $30.75 billion at the end of the week.

The stock has been on the rise for almost a year now, thanks to its strong financial performance. Zomato’s net profit for fiscal 2024 stood at INR 351 Cr compared to a net loss of INR 971 Cr in the previous fiscal. Further, EBITDA rose to INR 42 Cr compared to an EBITDA loss of INR 783 Cr this year.

Zomato’s consolidated net profit increased multi-fold to INR 253 Cr in the first quarter of the fiscal year 2025Revenue from operations increased by 74% to INR 4,206 Cr in Q1 FY25 from INR 2,416 Cr in the corresponding quarter of the previous year.

Going forward, the company is working to scale its outbound vertical with a new app called District. To that end, it has announced the acquisition of Paytm’s entertainment and ticketing business for 2048 Cr INR in August.

Then JP Morgan Changed Target Price (TP) Zomato (PT) share price target to INR 340, indicating a 40% upside on September 5.

The brokerage attributes its bullish outlook to Blinkit’s expansion by Zomato, which successfully rolled it out across all major metro cities after demonstrating its profitability in the NCR region.

The brokerage expects Blinkit’s scale to significantly increase monetization through channel margins and advertising revenue. Additionally, improved store-level economics are expected to further boost the company’s EBITDA outlook, it said.

Meanwhile, Zomato’s GST woes continued grow deeper per week. This week, the West Bengal GST authorities imposed a fresh tax order and penalty of over INR 17.70 Cr per week.

ixigo emerges as the biggest loser of this week

Shares of ixigo continued to decline during the week, declining 6.99% to INR 144.70 Cr. With this, the company’s market capitalization also fell to $671.7 Mn (INR 5607.95 Cr).

ixigo was founded in 2007 by Aloke Bajpai and Rajnish Kumar. Its revenue comes from selling a wide range of travel services, including flights, train and bus tickets, hotel bookings and holiday packages.

Bus ticketing platform AbhiBus, owned by ixigo, recently tied up with German travel technology company FlixBus as it expands its presence in India.

In the first quarter of fiscal year 2025, ixigo published PAT increase by 78% to INR 14.85 Cr as compared to INR 8.36 Cr in the corresponding quarter of the previous year. Revenue from operations increased by 16% to INR 181.87 Cr from INR 156.55 Cr in Q1 FY24.

Gross transaction value grew by 26.6% to INR 2,988.1 Cr during the quarter as compared to INR 2,359.1 Cr in Q1 FY2024. The startup’s EBITDA grew by 62% YoY to INR 19.2 Cr in Q1 FY2025.