Lock-in for CarTrade Tech shares end today. Will Zomato-like crash repeat?

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CarTrade Tech shares listed on BSE and NSE on 20th August 2021 with a minor discount. However, the tech stock has been nosediving after listing and CarTrade Tech shares are today available at 633 apiece on NSE, around 60 per cent lower from its offer price of 1,585 to 1,618 per equity share. However, the stock may further witness Zomato share like crash as one year lock-in for the pre-IPO investors end today and such investors who hold around 57 per cent of the net shares of CarTrade Tech may decided to book loss and exit.

CarTrade Tech share price today opened downside and went on to hit intraday low of 595 apiece on NSE within few minutes of stock market’s opening bell. However, the tech share pared its early morning losses and currently trading around 630 per share levels (at 11:40 AM) on NSE.

CarTrade Tech has floated around 4.66 crore shares out of which around 2.66 crore shares are stuck with pre-IPO investors who were unable to exit the counter due to one year lock-in. As CarTrade Tech shares were listed on BSE and NSE on 20th August 2021, its one year lock-in ends today and now such shareholders of CarTrade Tech are now free to exit the scrip and look at other options.

Last month on 23rd July 2022, one year lock-in of Zomato shares for pre-IPO investors had ended during weekend. However, on Monday, when the market opened, the food platform company’s stock witnessed heavy sell-off and the stock hit a new low of 40.60 on NSE after losing 11.20 per cent and 12.50 per cent on Monday and Tuesday respectively. So, when the market opens today, if CarTrade shareholders belonging to these 57 per cent lock-in shareholders’ group, decides to book loss, then there can be big downside happening in the counter.

Speaking on how much severe the sell-off could be, Avinash Gorakshkar, Head of Research at Profitmart Securities said, “The new stocks available for selling today is around 57 per cent, which is huge. So, some sell-off can be expected in the tech share and most probably it is expected in first few hours of the market opening.” He said that the investor who can now sell out CarTrade Tech shares are among the pre-IPO investors and hence their cost price would be much lower than the offer price of CarTrade Tech IPO. So, they might decide to sell some of their shares and see what kind of buyers are coming in.

“If some big investors decide to take advantage of this sell-off then there can be some sharp rebound in the CarTrade Tech counter as we witnessed in Zomato shares,” said Gorakshkar.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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