Zomato is adequately capitalised and employees do not need to worry about anything except execution, Deepinder Goyal, Zomato’s Co-founder and Chief Executive Officer tells employees in an internal communication as the company’s stock plunged to an all-time low.
Zomato, which got listed on the stock exchanges in July last year, saw its share price falling to an all-time low of Rs 90.95 a piece on Monday. The stock ended below Rs 100 a share for the first time ever, after it plunged nearly 20% on Monday. On the National Stock Exchange, Zomato’s stock closed at Rs 91.35 a share, nearly 47% down from its all-time high of Rs 169, which it had hit 16 November last year. The broader market, too, witnessed a sell-off on Monday, with the benchmark indices falling over 2.6%.
Goyal said that he was waiting for a bear market for a long time, as only companies with ‘solid teams and execution’ manage to rise amid a bear market. He said that valuation can swing massively without any changes in the fundamentals of a business. Goyal attributed the plunge in Zomato’s share price to sell-off in shares of tech companies globally.
“I want to reiterate; we cannot control market sentiments. What is in our control is our execution and the value we create for our internal and external customers,” Goyal told employees in the letter accessed by VCCircle.
Interestingly, Goyal’s communication to employees comes at a time when Zomato’s rival Swiggy, operated by Bundl Technologies Pvt Ltd, said that it raised $700 million from a bunch of global investors. The fundraise nearly doubled Swiggy’s valuation to $10.7 billion. Zomato’s valuation, meanwhile, has dropped to $9.64 billion at close of Monday’s trading.
Other recently listed new-age technology companies have also seen their share prices plunging. Shares of FSN E-Commerce, which owns and operates online beauty and cosmetics retailer Nykaa, have fallen over 30% from their all-time high. On Monday, the stock closed at Rs 1,745 a share. Paytm, meanwhile, operated by One97 Communications, has been the worst hit, as the stock has fallen over 55% from its issue price of Rs 2,150. On Monday, the stock ended at Rs 916.