Shares of Paytm, Zomato, PolicyBazaar and Nykaa – four Indian tech startups that went public last year – fell to their record lows since last year’s market debut on Monday as analysts predicted a global market correction as US investors rallied Prices are worried about the prospect of high interest rates.
Paytm’s shares fell 6% on Monday to as low as £902 ($12.10), the lowest since its public debut in mid-November. The market cap of the mobile payments company, which debuted with an issue price of £2,150, has shrunk to $7.9 billion, less than half what it was Valuation of $16 billion raising $1 billion in a private financing round in the second half of 2019.
Nykaa shares fell over 11% to ₹1,740 ($23.35) a share, from an all-time high of ₹2,574 ($34.5). Zomato’s shares experienced the sharpest decline among the four tech companies above, falling over 18.5%. Shares fell from an all-time high of £169.10 ($2.27) to as low as £91.7 ($1.23) a share. PolicyBazaar fell over 8% to £787 ($10.5) apiece, nearly half its all-time high of £1,470.
The latest slump — which hasn’t hit other Indian stocks as badly — comes as shares of tech companies, which have risen amid the pandemic in recent years, are beginning to see what many analysts are calling a “correction.”
The rally has also helped startups raise capital globally with record valuation jumps and speeds. But several investors are now publicly telling startups that those times are soon over — at least indefinitely.
“Market sentiment is changing faster than startups can change operations, cost structures or monetization levers,” said Shailendra Singh, a venture capitalist at Sequoia Capital India, in a tweet last week.
“I look forward to a much-needed fix in the startup funding environment; Thankfully, conversations are refocusing on revenue, products, device economics and money savings.”
At an Axios conference last week, Rajeev Misra, chief executive of SoftBank Vision Fund, said SaaS stocks in the US have fallen from 20 times sales to 12 times. “They’re still 20x or more in the private markets… I think that gap will narrow over the next six months,” he added.
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