Food delivery company, Zomato is in a bloodbath on stock exchanges since the start of this week. Tuesday resulted in more beating with Zomato shares hitting a fresh 52-week low. Following the loss of love in Zomato shares, it reminded veteran Shankar Sharma of the movie Deewar where Bollywood’s Big B, Amitabh Bachchan quoted a famous dialogue when he found the news of his father’s death. The veteran concluded that Zomato shares were a game over on the listing itself. In a span of two days, Zomato shares have dropped by more than 22% on BSE. On BSE, Zomato shares settled at ₹41.65 apiece down by ₹5.90 or 12.41%. The shares were near the fresh 52-week low of ₹41.25 apiece that was clocked earlier in the trading hours. At the current market price, Zomato has a market valuation of ₹32,793.77 crore. The nosedive in Zomato shares emerged since Monday. From July 22, when the shares were around ₹53.65 apiece on BSE, the shares have clocked a free fall of about 22.37% in two days this week. Last week, on Friday, Zomato shares announced to consider and approve the un-audited financial results (standalone and consolidated) of the company for the quarter ended June 30, 2022 (Q1FY23) on August 1, 2022. Shankar Sharma today said, “Zomato stock reminds me of what Amitabh Bachchan said in Deewar on hearing news of dad’s death: “Mar to woh bees saal pehle gaya tha. Aaj to sirf ussey jalaya ja raha hai” (He died 20 years ago, today he is just being burned)”. Referring to Zomato shares, Sharma said, “It was game over on listing itself.” Zomato stock reminds me of what Amitabh Bachchan said in Deewar on hearing news of dad’s death:” Mar to woh bees saal pehle gaya tha. Aaj to sirf ussey jalaya ja raha hai”.
It was game over on listing itself.— Shankar Sharma (@1shankarsharma) July 26, 2022
Have Zomato shares met their doomsday?
Zomato launched its IPO from July 14 to July 16 last year at a price band of ₹72 to ₹76 apiece. Cumulatively, the IPO had received a strong demand from investors as the issue got oversubscribed by 38.25 times. After the IPO, Zomato shares made their market debut on BSE and NSE on July 23, 2021. The shares were listed at a premium on the stock exchanges. On BSE, the shares made their entry at ₹115, up 51.32% from the IPO’s upper price band. The shares later clocked a 52-week high of ₹169.10 apiece on BSE. The last time Zomato shares were above ₹100 mark was January 25 this year and since then it has been trading below the level. In a month, Zomato shares have dropped nearly 37%, while year-to-date, the decline is whopping over 70.5%. Since its market debut, the shares have contracted by nearly 67% on BSE. Is it game over for Zomato shares? Analysts at Jefferies in their report said, “Worries of Fed tightening are weighing on the profitless Internet names globally. The entire sector has been going through a period of readjustment as the focus is shifting from growth to cash flow. FANGMAN is down 15-65% YTD. This has also been impacting the global food delivery stocks which are down 50-65% YTD, with Zomato being the worst performing stock.” As per the analysts, tough times have changed the focus and brought acute focus on cash flow across start-ups. Zomato management has also accelerated its journey towards better unit economics and is now eyeing a break-even in the food delivery business in the foreseeable future. Adj Ebitda losses for 4QFY22 were
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