Major Sell-Off: Societe Generale Exits Zomato Shares Worth INR 117 Cr, Invests in Policybazaar

Major Sell-Off: Societe Generale Exits Zomato Shares Worth INR 117 Cr, Invests in Policybazaar

The ongoing turbulence in the Indian equities market, fueled by foreign institutional investor (FII) pullout and anticipation of the US Fed's next move, sent tremors through the new-age tech sector on the final trading day of January 25th. Among the companies feeling the heat was Zomato, the food delivery giant, which faced a significant selloff by French investment banking giant Societe Generale.

In a block deal, Societe Generale offloaded over 86.5 lakh shares of Zomato at an average price of INR 136.20, amounting to a total of INR 117.81 crore. This significant divestment added to the broader market sentiment, further driving down Zomato's share price in the session.

However, while Societe Generale shed its Zomato holdings, it simultaneously turned its attention to another promising player in the tech landscape - Policybazaar, the leading fintech platform. The investment firm picked up almost 5 lakh shares of PB Fintech at a price of INR 922.95 per share, for a total of INR 46.13 crore. This strategic move suggests confidence in Policybazaar's growth potential, despite the bearish undercurrent in the market.

Analysts attribute the contrasting actions of Societe Generale to a combination of factors. The Zomato selloff is likely a continuation of broader FII profit-booking ahead of the upcoming Union Budget and the US Federal Reserve's crucial interest rate decision. With both these events having the potential to influence market dynamics, FIIs are choosing to play cautiously, taking profits from companies that have seen significant run-ups in recent times.

Conversely, the interest in Policybazaar might reflect a belief in the company's resilience and strong fundamentals. Despite the overall market pessimism, Policybazaar continues to witness robust growth and increasing adoption of its insurance platform. This, coupled with its relatively less volatile price movement compared to other new-age tech stocks, might have made it an attractive proposition for Societe Generale.

The contrasting fortunes of Zomato and Policybazaar in this instance highlight the selective approach that investors are adopting in the current market environment. While profit-taking and risk aversion prevail in some segments, others continue to draw interest based on their individual strengths and growth potential. The coming weeks, with the Union Budget and the US Fed's decision looming, will be crucial in determining the next chapter for the Indian equities market and, by extension, the new-age tech sector.

Avatar of Author

January 28, 2024

Kalpana Maurya