ET Intelligence Group: For Indian investors, the bumper listing of
Zomato, a first generation internet unicorn, has been surprising. It is no secret that its valuations defy conventional wisdom. Can the stock sustain the initial euphoria?
While analysts are projecting strong growth, there are no major fundamental reasons to justify such high valuations. But the answer for this may be found somewhere in the past bumper listings and how those stocks have fared over the years.
Since 2015, there have hardly been any stocks (issue size more than ₹500 crore) that have seen over 50% listing gains and then underperformed. Out of 16 such IPOs, only 3 stocks have underperformed Nifty since the day of the listing. These are Ujjivan Bank, Mrs Bectors Food and Indigo Paints.
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