Zomato stock undergoes an unconvincing rebound after dropping to record lows

NEW DELHI (CoinChapter.com) — Zomato stock opened July 27 in positive territory. Nonetheless, its likelihood of continuing its downside move remains high.

Notably, ZOMATO rebounded by up to 9.24% to $44.40 in the early morning session at Indian stock exchanges. Nonetheless, the stock opened at a record low of Rs. 40.60, down nearly 65% from its premium debut price and 76% from its all-time high.

That Zomato ‘lock-in’ FUD

The losses and modest rebound came as a one-year lock-in for promoters, shareholders, employees, and other parties ended July 26.

Since it was initially issued at 76 cents per equity share in the primary markets around a year ago, the stock is anticipated to continue being the bears’ preferred sell-on increase for short to medium term.

Therefore, following the expiration of the one-year lock-in period, Zomato shareholders, who account for about 78% of the company’s total paid-up capital, would attempt to sell their shares whenever the stock rose, particularly when it approached the suggested price of 76 per share.

In other news, the Board of Directors of Zomato recently authorized a proposal to buy the rapid commerce business Blinkit, but rumors claim that the investors are uneasy about the deal.

The stock price is extremely close to the estimate that Aswath Damodaran, a finance professor at New York University, had made before Zomato’s initial public offering (IPO). The shares, he claimed, were only worth Rs. 41.

Those who owned a firm’s shares before the IPO are prohibited from selling those shares for a year following the listing, following regulations established by the market regulator Sebi.

Shares of Info Edge, which also owns a stake in Zomato, decreased by around 2%.