Did market correction make new-age stocks value buys?

 The recently-listed companies, especially from the digital space, have tumbled nearly 50% from their recent highs following the correction. Yet, market watchers don't see them as value buys just yet

The recent bout of profit-booking has eased concerns surrounding valuations in the market. At the headline level, the benchmarks have corrected nearly 10 per cent from their record high levels while individual stocks have tumbled nearly 50 per cent from recent peaks.

Among these, shares of recently listed companies, especially from the digital space, have been the worst hit.

FSN E-Commerce Ventures (Nykaa), PB Fintech - the parent company of Policybazaar, Tega Industries, Tarsons Products, Aditya Birla Sun Life AMC, SJS Enterprises, Indigo Paints, Anand Rathi Wealth, and Glenmark Lifesciences hit their respective lows since listing on December 20.
Further, 50 per cent of the companies listed in the past two months are trading below their issue price, including RateGain Travel and Technologies, Star Health and Allied Insurance, Paytm, and Policybazaar

And analysts say the worst may not be over for some of them yet.

G Chokkalingam, founder and chief investment officer at Equinomics Research, for instance, suggests investors should carefully analyze the business prospects of each of these companies before making an investment decision.
Gaurav Garg, head of research at CapitalVia, echoes a similar sentiment and says that the current market sentiments have put almost all the IPOs on backfoot and we have seen muted listings on most of them. I think in the current market situation, most of the blue-chip companies with strong balance sheets are available at decent valuations. Investors should look at buying them and can wait for a few quarters more to see the performance of recently listed companies.

The so-called hurried decision to hit the market by new-age companies followed a strong bull run and a gush of liquidity in the markets.

According to an analysis by Kotak Mahindra Capital Company, the year 2021 saw the highest-ever IPO volumes in the country with the volumes surging to $15.3 billion, as against $4.2 billion in 2020.

That means the Street saw more IPOs in 2021 than in the year past three years combined, both in the number of listings and the amount raised.