3 Newly Listed Companies Ended Near 52-Week Lows: What Experts Advice?

The indices are not gaining their mojo back and could be in more trouble going ahead due to the global factors currently overshadowing the Indian markets. And amid this, some of the newly listed companies have taken an immense beating and continue to trade near their all time lows.

Of them in particular we talk about Paytm, Car Trade and Fino Payments Bank that hit 52-week lows in the previous session, when the Nifty again fell for the fourth consecutive day by 70 points, though huge downside cannot be ruled out, given the way the Ukraine-Russia crisis is panning out.

Paytm:

The highly popular payments company which could not make its standing in the stock markets so far hit an all time low price of Rs. 805 per share on February 21, 2022. The stock after weak listing on November 18, 2021 has nosedived from the issue price of Rs. 2150 per share. Implying the stock has more than halved from its IPO price. In 1 month alone, there is a correction of 16% in the stock.

Goldman Sachs and ICICI Securities iterate 'Buy' call on Paytm

Given the company's latest performance i.e. considering the gross merchandise value which doubled over a YoY period, Goldman Sachs maintains buy for a target of Rs. 1460. "Paytm continues to gain market share across UPI as well as non-UPI payment segments, and its lending business is seeing strong traction, according to Goldman Sachs.

 

CarTrade:

 

This automobiles dealers company also hit a 52-week low price of Rs. 560 per share in the previous day's trade.

In the Q3 period, the company posted a net loss to the tune of Rs. 23.36 crore. Net sales at the firm however rose by over 14% to Rs. 88.78 crore. There have been a couple of catalyst triggering the price of CarTrade lower including slowdown in the auto space and aversion to stocks that are richly value and have no near term profitability visibility.

Deepak Shenoy, Founder, Capitalmind, suggested going slow for these stocks and that he would pick a larger portion when the firms' results come and there is more commentary on them, but in general, these are going to be volatile stocks will be, he said.

"We will see them fall 60 percent, they could go up like they went up around 50-60 percent of the last year and not just the tech pack, but in general anything that's gone IPO last year, I think there is going to be a significant set of volatility, first downside and then later perhaps upside. So it makes sense if you understand the businesses to start taking positions and start thinking of taking positions but in general, I would say spread it over a period rather than all at once," he explained.

 

Fino Payments Bank:

This is another new age bank that dropped to an all time low of Rs. 290 per share. The IPO issue price for the stock was at Rs. 577. Fino Payments Bank is a fintech company.

The bank in the 3rd quarter posted a profit of Rs. 14.1 crore.

ICICI Securities in its January report gave a buy call on the stock for a 1-year period for a target of Rs. 475. "Fino is uniquely positioned to capture growing opportunities in rural India, led by deep-rural products like MATM (~51% market share as on Aug'21) & AEPS, tailor-made CASA accounts for under-served population, and payment app called "FinoPay" targeting rural population. Further on B2B2C side, it offers CMS service (110 partners) and distribution of gold / business loans. Diversified revenue stream, merchant-led asset-light distribution model and deep rural network with operational presence over 90% districts are key features of its unique business model and also the primary reason behind Fino turning profitable within 12 quarters. Notably, unlike other players, Fino is rapidly building organic customer base (~3.4mn) and merchant base (~0.8mn) without burning cash; annualised PAT margin stands at 4% with total annualised throughput of ~Rs1.7trn as on Sep'21", said the brokerage.

 

Stock	IPO price	Current price	Downside	Target
One97 Communications	Rs. 2150	Rs. 807.7	62.00%	Rs. 1460
CarTrade	Rs 1618	Rs. 562.3	65.00%
Fino Payments Bank	Rs. 577	Rs. 291.65	49.00%	Rs. 475

 

Disclaimer:

The markets are highly volatile and the above calls on the newly listed companies' are as given out by experts. Please be extremely careful with your investment decisions.

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