omato share price fell as much as 4.7 per cent to Rs 82.15 apiece on BSE in intraday deals on Tuesday, after the Competition Commission of India (CCI) initiated investigation on its and Swiggy’s business practices.
Zomato share price fell as much as 4.7 per cent to Rs 82.15 apiece on BSE in intraday deals on Tuesday, after the Competition Commission of India (CCI) initiated investigation on its and Swiggy’s business practices. Zomato stock has been underperforming headline indices for the last three months. On-year to date basis, it has tumbled 41 per cent, as compared to a rise of 2 per cent in BSE Sensex, and 2.09 per cent in NSE Nifty 50. “We believe that we can expect a bounce back in the stock. Company has been trying to generate new avenues which would in turn increase the revenue streams and hence we expect that we will see a bounce back in the stock prices in the short term,” Likhita Chepa, senior Research analyst at CapitalVia Global Research, told FinancialExpress.com
The CCI has launched investigations into Zomato and Swiggy (Bundl Technologies Pvt Ltd) related to dealings with restaurant partners, neutrality, alleged unfair pricing, and other aspects. “The Hon’ble Commission has mentioned that it has prima facie not found concerns with respect to our independence on levy of commissions or alleged bundling of services, while it would want to investigate aspects such as preferential listing of restaurant partners and pricing parity across platforms, etc,” Zomato said in a BSE filing.
Zomato stock hit a 52-week low of Rs 75.55 apiece on 16 March 2022, tumbling over 55 per cent from its all-time high of Rs 169.10, touched in November last year. In traded volume terms, a total of 14.66 lakh shares exchanged hands on BSE, while 2.4 crore shares traded on NSE, so far in the trade. “Technically, 76-78 is a very strong support zone. 89 remains a strong resistance. As long as 76-78 support is held on daily basis, investors can hold the stock,” AR Ramachandran, Co-founder & Trainer, Tips2Trades, told FinancialExpress.com
Zomato, in a BSE filing, also said that it will continue to work closely with the Hon’ble Commission to assist them with their investigation. “We will explain to the regulator why all of our practices are in compliance with competition laws and do not have any adverse effect on competition in India. We intend to promptly comply with any recommendations given to us by the Hon’ble Commission,” it said. Ravi Singh, VP & Head of Research, Share India Securities, advised investors to hold their positions and keep a watch on 75 levels which is crucial to decide the course of future trend. “The closing below the said level may leads to further selling. As the CCI officials will submit their report in 60 days, the stock may remain sideways till the outcome of the investigation is revealed,” Singh told FinancialExpress.com.
