Shares of food aggregator Zomato are under pressure after the lock-in period of pre-IPO ended on July 23. The stock has moved southward by around 18 percent in the last five sessions. On Wednesday, Zomato’s share price hit a fresh low of Rs 40.60 apiece, giving more jitters to retail investors.
Zee Business Managing Editor Anil Singhvi has advised retail investors to stay away from the food delivery platform’s stock and look for better options. He said that it all depends on “how you look at Zomato”, adding that the first factor is “will this selling take a pause now and the scrip will no longer be under pressure?”. The second is that if you buy it now, on what triggers it can gain?.
He said that those selling are holding a stake in Zomato before the IPO. “They are not promoters but have the mindset of promoters. When promoters are selling, what is the need for retail investors to buy?.”
“It might be possible that stock’s price which is Rs 40 now could go up to Rs 50-55, generating 20 percent return. But the scope of the loss is also high,” he said.
“I would suggest that Zomato is not a buy…if your view is short term that is another factor… you make a quick trade and exit. Otherwise, you have better options,” the market guru explained.
At the time of filing this report 11:15 AM, Zomato share price was up by around 5% to Rs 43 apiece on the NSE.
Zomato IPO was listed on the stock exchanges on July 23 last year. The online food delivery giant’s stock has fallen nearly 70 percent this year.