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Getty Images. Company Summary. Wipro Ltd.
The grass is always greener on the other side. Some analysts prefer to say the same thing about the e-commerce businesses, the biggest buzz in the industry lately. Some unlisted e-commerce names such as ANI Technologies Ola , Oravel Stays Oyo Rooms and One97 Communications Paytm have been creating quite a splash in the unlisted market, mainly on the strength of their titular value, drawing in small and retail investors.
Many such investors flocking to these counters are not even aware of the challenges of the unlisted space, especially with regard value fluctuation and limited liquidity. Many are drawn to such propositions on the lure of attractive valuations and herd mentality. That, even when these companies continue to incur losses. One 97 Communications, which houses the main payments business of Paytm, reported an over four-fold rise in consolidated revenue in FY18 at Rs 3, Meanwhile, Paytm Mall reported a loss of Rs 1, Combined losses of One 97 and Paytm Mall swelled per cent to Rs 3, crore in FY18 from Rs crore in FY17 while combined revenues went up by per cent during the same period to Rs 4, crore.
For the year ended March , OYO India reported a marginal widening of net loss to Rs crore for India operations against Rs crore loss reported for the previous financial year. The firm reported an operating revenue of Rs crore for financial year compared with Rs crore reported for financial year Flipkart India led the way with an unmatched margin. Net loss of the e-commerce giant grew over per cent in FY18, though revenue growth during the period was 39 per cent.
What then justifies the sky-high valuations that these stocks are commanding in the unlisted space? They do not owe or possess any tangible assets like land, plant, or warehouse.
Also, they incur huge losses and do not have any other reserve as well. Despite this, their valuations keep going up to billions. Remember, Flipkart sold its controlling stake to Walmart at Rs 1.
Why invest in e-commerce?
Dinesh Gupta, Partner at unlistedzone. What is the theory? Fair value of any stock is very subjective till it gets listed. Even the largest e-commerce company of the world, Amazon, does not make any money, Ginodia points out. Since there is no structural mechanism, they are inflating valuations at will. A trend or a business? E-commerce is the new trend currently. But once sentiment weakens, investors may rush to offload them. Gupta says when a company is not listed, it does not need to focus on investors.
This is why any valuation is considered okay. Similarly, if Wipro had not given any bonus or split its share, the stock value would have been Rs 5 lakh today. Key concerns E-commerce stocks do not see much volume in the unlisted space, mostly because of high valuations. He said investors should be very cautious while investing in the unlisted space. Therefore, changing market sentiment during the time difference may cause the NAV to deviate from the closing price. International Holdings. The premiums and discounts for funds with significant holdings in international markets may be less accurate due to the different closing times of various international markets.
Because the Funds trade during U. Investing involves risk, including the possible loss of principal.
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And you can, of course, opt-out any time. Fund Map. Why EBIZ? High Growth Potential EBIZ enables investors to access high growth potential through companies that are positioned to benefit from the increased adoption of E-commerce as a distribution model.
Unlisted market: Why e-commerce stocks like Ola, Oyo, Paytm trade at eye-popping prices
Unconstrained Approach EBIZ's composition transcends classic sector, industry, and geographic classifications by tracking an emerging consumer theme. Performance History. Premium Discount Chart. Top 10 Holdings. Full Holdings. Cash, where shown, includes other assets and liabilities, such as payables and receivables. What causes these time discrepancies?
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