Zomato Ltd newly listed stock now ruling at Rs. 133, with M cap of Rs. 1.05 lakh crore, is seen being hugely bought by the retail investors. Reason is simple, stock gave a huge listing, on which Media and Experts are giving buy calls. But how many investors having bought shares know this -

1)    Company has no Promoter,

2)    59% stake is held by 58 Foreign Investors,

3)    6.38 lakh retail investors are holding 2.21% stake as at 22-7-21, on IPO Allotment. But remember that many of them may have booked gains on listing day, as many of them apply in IPO, by selling them in advance in the Grey market, on expected allotment quantity.

4)    Share is ruling at 52x of its sales multiple, which is nothing but bankruptcy of financial prudence/ wisdom and logic of investment.

5)    FY 21 had losses of  Rs.500 cr, while company is unlikely to have its PAT in Black for the next 2 years atleast.

6)    As PE & Foreign Investors have financed this company earlier, but could not find an exit, have structured IPO, eventually to exit.

7)     No listed stock, of this type  has survived for more than couple of years, while this stock has to eventually see fate of PENNY STOCK.

8)    Won't be surprised to this craze of New Generation or Digital Stock, on Crazy Global Model Valuation, seen turning in phobia, as profit is the key of any listed stock. Peer global companies have already seen a big fall recently, viz. Alibaba and Ant, being 2 Chinese stocks.

Here same investors, on seeing small dip in profits (with PAT still seen in Black) exit from the stock, but what has made them so progressive, intelligent, and visionary to invest in this stock?

Seeing Foreign Investors in the company, made us sing the song of Movie “Jab Jab Phool Khile”
Pardesiyon Se Na Aankhiya Milana
Pardesiyon Ko Hai Ek Din Jaana (Share Bech Kar :) )

This is not a Buy or Sell recommendation, while stock recommendations are provided exclusively to our paid members in the Member Zone.