Swiggy, OLA to FirstCry — New-age Tech Stocks Plummet Below IPO Prices Amid Market Crash
New-age tech stocks crumble under selloff pressure
In an increasingly treacherous market, Indian new-age tech stocks have become less appealing to investors, with risk-off sentiment growing amid global uncertainty triggered by Donald Trump’s tariff announcement, potentially sparking a new trade war. The entire domestic market has been under severe stress in recent months, weakening further in February, sending stocks to multi-month lows and eroding significant market value. New-age tech, once the darlings of the market, is no exception.
Stocks in the dock
Several new-age tech stocks, including Swiggy, OLA, Honasa Consumer, Unicommerce eSolutions, and Brainbees Solutions (FirstCry), have slid below their IPO prices, with the latter two trading at significant discounts to their listing prices. Swiggy, once a high-flying stock, has corrected 47% from its recent high, trading at ₹326.30 per share, a 16.7% discount to its IPO price of ₹390 apiece. OLA Electric Mobility, another new-age tech player, has also suffered, sliding 27.5% below its IPO price at ₹55 per share.
The selloff continues
Zomato, which maintained a one-way rally between March 2023 and December 2024, is now facing severe battering from Dalal Street investors, leading to a 21% correction in January. At current levels, it’s trading at ₹222, a 27% discount to its all-time high of ₹304.70 per share. Despite such a steep fall, the stock is still trading at a price-to-earnings ratio of 323 times. Other new-age tech stocks, such as Unicommerce eSolutions and Brainbees Solutions, have also faced severe corrections, with the latter trading 4.6% below its IPO price of ₹108 per share.
Expert Insights
Dr. V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, believes that uncertainty from Trump’s tariff policy is exacerbating global trade tensions. "Uncertainty unleashed by Trump is aggravating global trade tensions. The 25% tariff on Canada and Mexico, along with the 20% tariff in China (including the additional 10% imposed recently), indicates that threats are turning into action. The retaliation to these Trump tariffs is yet to be seen, but there will certainly be responses," he noted.
No relief in sight
As India grapples with its own growth challenges, Trump’s series of tariff announcements has rattled investor confidence, stirring up global volatility. The Indian market has been hit even harder, with valuations remaining stretched compared to global peers. "There is one factor that will tame Trump, and that is the market reaction. Even mighty Trump cannot influence markets. Tariffs will soon drive up inflation in the US, which could prompt the Federal Reserve to turn hawkish. The US stock market, currently priced to perfection, could suffer a severe correction or even a crash. This outcome, which Trump abhors, may force him to reconsider his stance and bring some balance to his policies. We don’t know when this will happen," he added.
Conclusion
As the world grapples with the implications of Trump’s tariff policy, new-age tech stocks are bearing the brunt of a selloff. With valuations remaining stretched and global uncertainties rampant, investors would do well to remain cautious and wait for the dust to settle. As one expert opined, "There is little chance of a rebound in the Indian market, even though valuations are now fair. I advise investors to remain cautious and wait to see how the situation unfolds."
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