While privately-held Indian startups continue to rake in record levels of money and touch record valuations, the reception of tech startups at the public market is beginning to sour.
Prominent listed Indian startups have seen their stocks fall at the public markets over the last few months. These include Paytm, which had registered India’s worst IPO since 2011 and is continuing to see its stock plummet, and Policybazaar, which had opened smartly on debut, but now trades significantly below its IPO price. Here’s how India’s tech startups area faring at the stock markets.
Paytm had a horror debut at the stock markets — its stock opened 10% below its IPO price of Rs. 2150, and continued to fall through the day, ending up at 27% below its IPO price. This was the worst IPO-day performance for any major stock since 2011, and Paytm’s pain didn’t quite end there — over the next few days, Paytm’s stock fell further to a low of Rs. 1271 per share, a stunning 40% fall from its IPO price.
Paytm did try to stage a recovery — its stock briefly rose from its lows, but has consistently fallen over the last month. Today, its stock fell another 2.5 percent, ending the day at Rs. 1252 per share. This is a lifetime low for the stock, and represents an erosion of Rs. 60,000 crore in shareholder wealth.
Policybazaar’s stock had an IPO price of Rs. 980, but had opened trading at a price of Rs. 1330, which was a smart 35% premium over its IPO price. The stock, though, has been consistently falling over the last few months, and fell below its Rs. 980 IPO price last week. That doesn’t seem to have stemmed the fall — Policybazaar’s stock fell another 5% today, ending trading at a price of Rs. 888 per share. The stock, over the last few months, has fallen a sharp 33% from its all-time high, and currently trades at its all-time low.
Nykaa had been off to a dream debut at the stock markets — the stock had listed at twice its IPO price, and had immediately made Falguni Nayar the richest self-made woman in India. The stock remained strong for the first month of trade, making another high of nearly Rs. 2500, before settling into a consistent downward trend. Nykaa’s stock currently trades at Rs. 2001, which is close to its all-time low, and a sharp 20% fall fromits all-time high.
Zomato was the first Indian tech startup to go public, and it had had a smart opening at the stock markets. Its stock had risen nearly 60% on opening day, and even rose to a price of Rs. 160 in the subsequent months, which was nearly twice its IPO price. Zomato’s stock, though, has cooled off since then, and currently trades at Rs. 130, which is nearly 20% below its all-time high.
Of all of tech startups which have gone public, the one which has had the worst time at the stock markets is CarTrade. The stock opened close to its IPO price of Rs. 1650, but has been in freefall since then. It currently trades at just Rs. 832 per share, which is a near 50% fall since its IPO.
Of the five prominent tech startups which had gone public, only two — Zomato and Nykaa — currently trade above their IPO prices. The other three have done poorly — CarTrade trades 50% below its IPO price, Paytm trades more than 40% below its IPO price, and Policybazaar trades nearly 10% below the price at which it had gone public. But more worryingly, even as broader stock markets have recovered this week, startup stocks still seem to be languishing, and four out of the five — with the exception of Zomato — are trading at lifetime lows. While private markets continue to create record numbers of unicorns, there are now signs from the public markets that a correction in private startup valuations might just be around the corner.