Swiggy, OLA to FirstCry — New-age tech stocks plummet below IPO prices amid market crash

Indian new-age tech stocks, known for their premium valuations, have become less appealing to investors as risk-off sentiment grows amid global uncertainty following Donald Trump’s tariff announcement, which could potentially trigger 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, with new-age tech being no exception.

Notably, the crash has also pushed several stocks, including Swiggy, OLA, Honasa Consumer, Unicommerce eSolutions, and Brainbees Solutions (FirstCry), below their IPO prices.

New-age tech stocks crumble under selloff pressure

The once high-flying Zomato stock, which maintained a one-way rally between March 2023 and December 2024, is now witnessing severe battering from Dalal Street investors, leading to a 21% correction in January. At current levels, it is 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. Its peer, Swiggy, has faced even more pain, correcting 47% from its recent high and currently trading at ₹326.30 per share. The crash has also brought the stock to trade below its IPO price of ₹390 apiece.

Both stocks have also come under pressure amid rising competition in the quick commerce segment. Soon, these companies will face another competitor on the exchanges, as India’s BigBasket is reportedly planning to go public in the next 18 to 24 months. Further, weak December quarter earnings amid rising costs in the Q-Commerce space also dented investors’ sentiments.

Another new-age tech stock, OLA Electric Mobility, has also slipped below its IPO price during the recent selloff, trading at ₹55 per share—27.5% lower than its IPO price of ₹76. 

Reports suggest that the company is attempting to reduce operating expenses by cutting employee costs. According to a Bloomberg report, the company is looking to lay off over a thousand employees and contract workers to contain losses. This would be the second round of job cuts in under five months, as Ola Electric had reportedly laid off around 500 employees last November.

Some newly-listed stocks on the bourses, including Honasa Consumer, have sharply declined. The stock has tumbled 61% from its peak to ₹209, falling 35.2% below its IPO price of ₹324 per share. Its peer, FSN E-Commerce Ventures (Nykaa), has also corrected 30.61% over the past year, currently trading at ₹159.45 per share.

Other new-age tech stocks have also faced steep corrections. Unicommerce eSolutions is down 64% from its recent peak to ₹102 per share and is trading 4.6% below its IPO price of ₹108. Similarly, Brainbees Solutions has declined 18.9% from its IPO price of ₹465 per share.

Meanwhile, Zaggle Prepaid Ocean Services has dropped 41%, PB Fintech is down 36%, Awfis Space Solutions has declined 32%, Paytm has fallen 31.6%, and Go Digit General Insurance is trading 28% lower from its recent peak.

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, as valuations remain stretched compared to global peers.

Dr. V. K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, said, “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.”

If Trump’s tariff policy continues on this path and starts impacting more countries, it could have severe consequences for global trade and the economy—India included. So, what will be the eventual outcome?

“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.

In the near term, Vijayakumar believes there is little chance of a rebound in the Indian market, even though valuations are now fair. He advises investors to remain cautious and wait to see how the situation unfolds.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.