Zomato Limited was listed on the bourses on 23rd July 2021. This means that the one-year lock-in period for the employees and others will end on July 23, 2022. Analysts have cautioned investors that there is a sell-off risk in the stock in the short to medium term which can drive the share price southwards.
The equity share capital held by companies before IPOs is locked for a period of one year from the date of allotment of shares. This rule applies to those companies that do not have promoters, and Zomato is one such company. During this lock-in period, the shareholders are barred from selling any equity shares.
Some of the major shareholders of Zomato Limited are Info Edge, Uber BV, Alipay Singapore and Antfin Singapore. They hold 78% of the total paid-up capital of the company collectively.
A few other companies which will soon be under sell-off pressure are CarTrade Tech Ltd (August 20, 2022), PB Fintech (November 12, 2022) and One 97 Communication-Paytm (November 17, 2022).
“Zomato shares were listed on BSE and NSE on 23rd July 2021, which means one-year lock-in for promoters, company employees, founders of the company, etc. is going to end next week. As these shareholders constitute around 478 per cent of the total paid-up capital of Zomato, shares of this food service platform are expected to remain under the sell-off pressure,” said Anuj Gupta, Vice President — of Research at IIFL Securities.
Zomato’s shares got listed on the exchanges at a premium of more than 51%. After giving stellar returns to their shareholders, the shares went on to reach their lifetime high of ₹ 169 apiece in November 2021. They breached the ₹ 1 trillion market cap during this post-listing rally. However, the stock has been under sell-off heat after climbing to its lifetime high and has been making new 52-week lows for the last few sessions. The shares are currently trading at ₹ 53.35 levels.
Written by Simran Bafna
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