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Shares of Zomato, which have been trading at around 68% discount from their 52-week high, can see a massive sell-off after July 23. The reason behind the expected sell-off is that around 613 crore shares will come out of mandatory one year lock-in, and will be available for normal trading. Apparently, the lock-in period on pre-offer equity shares will come to an end on July 23. This rule is applicable to such companies, which do not have promoters—Zomato is one of these companies with zero promoter holdings.
Explaining the rule, Zee Business research analyst says any company which does not have promoters, the equity share capital held by the company before IPO is locked for a period of one year from the date of allotment of shares. During this period, these shareholders are barred from selling any equity.
Among major shareholders who hold pre-offer equity shares are Info Edge, Uber BV, Alipay Singapore and Antfin Singapore. These shareholders collectively hold 77.9% of the current share capital.
CarTrade Tech, PB Fintech and Paytm in focus too
Other similar companies with no promoters’ holdings whose mandatory lock-in will expire this year are CarTrade Tech Ltd, PB Fintech and One 97 Communication (Paytm). CarTrade Tech will see mandatory lock-in easing on August 20, while PB Fintech and Paytm’s restrictions on sell of pre-equity share will end on November 12 and November 17 respectively.
फोकस में #Zomato
जोमैटो के लिए एक और नई मुश्किल
जोमैटो के शेयरों में आएगी बड़ी बिकवाली
#Zomato के शेयर के लिए नई दिक्कतें,अब क्या है – जानिए अरमान नाहर से…@AnilSinghvi_ @ArmanNahar #StockMarket pic.twitter.com/NMMPa757zO
— Zee Business (@ZeeBusiness) July 20, 2022
What should investors do?
Market expert advised investors to keep away from Zomato or any such company. He asked investors to usually avoid start-up based or PE funded stocks. On Zomato, he says he does not think one should buy this stock even at Rs 50.
Meanwhile, shares of Zomato were trading flat at Rs 53.85 after trading in the narrow range of Rs 53.60 to Rs 54.70 on the BSE on Wednesday.
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