Upcoming Doyens: Analysing the last one-month performance of new-age companies

The term “new age stocks” has become a buzzword in finance, conjuring images of tech-driven giants shaking up established industries. But what exactly does it mean, and should you consider these high-flying companies for your portfolio?

Redefining Business with Code: Imagine a world where food delivery happens via the app, makeup comes straight to your door, and hailing a cab takes a single tap. This is the reality fostered by new-age stocks – companies leveraging advancements in artificial intelligence, big data, and cloud computing to disrupt traditional sectors. Think Zomato, Nykaa, and Paytm: young stars in online food delivery, e-commerce beauty, and digital payments, respectively.

Growth Above All Else: Unlike their brick-and-mortar counterparts, new-age stocks prioritize rapid user acquisition and market domination over immediate profitability. This laser focus on growth fuels impressive user numbers but also leads to high valuations and volatile stock prices – think rollercoaster rides powered by investor hopes and anxieties about future earnings.

High Risk, High Reward? Investing in these digital trailblazers is a double-edged sword. On the one hand, their innovative potential offers the allure of astronomical returns if their business models take off. On the other hand, unpredictable revenue streams and uncertain paths to profitability make them inherently risky bets.

Performance of New Age Companies

Exploring the recent performance of prominent stocks over the past month reveals interesting trends. Notable returns include Zomato’s 10% gain, and Nykaa’s marginal -0.43% dip, while Paytm faced a notable -30.84% decline. PB Fintech and Delhivery experienced -3.55% and -8.33% downturns, respectively. On a positive note, Indiamart showcased a 6.75% rise, Mamaearth surged by 20.91%, and Tracxn emerged as a leader with an impressive 33.26% return. RateGain and Nykaa experienced slight fluctuations with returns of -0.31% and -0.43%, respectively.

The total market capitalisation of all the new age stocks is around Rs 3.44 lakh crore

Insights:

Warren Buffet’s Berkshire Hathaway executed a bulk deal on the NSE, selling shares of One 97 Communications, the parent company of Paytm, for a total of Rs 1,370 crore on Friday. This transaction marked the complete divestment of Berkshire Hathaway’s holdings in Paytm, as it sold 1.56 crore shares at Rs 877 apiece.

As part of its continual adjustment of the investment portfolio, SoftBank recently concluded the sale, aligning with its strategic realignment. Notably, this move follows a prior divestment in October, where the conglomerate sold a 2.54% stake in PB Fintech, amounting to 1.14 crore shares and fetching Rs 871.2 crore.

Delhivery, the integrated logistics provider, witnessed a substantial block deal involving 2.51% of its shares, valued at Rs 747 crore. Japanese investment giant SoftBank is indicated as the likely seller in this transaction, where approximately 1.8 crore shares of Delhivery were exchanged at a rate of Rs 403 per share.

In summary, these recent developments highlight notable shifts in the landscape of new-age companies. Despite variations, a majority of these firms have shown positive returns in the past month, contributing to an optimistic market sentiment. This positive outlook is further complemented by the upcoming IPOs scheduled for this week.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.