In the stock market, sometimes a stock makes investors rich overnight, and sometimes the same stock causes huge losses in a few months. Edtech company PhysicsWallah has emerged as the latest example of this. After a spectacular listing and initial momentum, the stock has now fallen nearly 45% from its 52-week high, leaving investors feeling trapped.
During the IPO in November, the company’s shares were offered in the price band of Rs 103-109. Investors embraced it and it performed tremendously on the day of listing. The share was listed at Rs 143.10 on BSE and Rs 145 on NSE, which was about 33% above the upper price band. Even after listing, the stock continued to rise and reached a 52-week high of Rs 161.99. At that time it was considered the new star of the market.
Now the trend of decline continues
After the initial excitement, things changed. Even on Thursday, the stock fell by more than 3% to Rs 88.90, which is even below its IPO price. The continuous decline has increased the concern of investors. Investors who had entered at a higher level are now facing huge losses. There is a strong discussion in the market regarding whether this stock has become a victim of overvaluation or the impact of the challenges related to the sector is visible.
Big decline in market cap also
The weakness of the stock has also affected the market capitalization of the company. At the time of listing, the market cap of the company was around Rs 45,975 crore, which has come down to around Rs 25,500 crore. That means, within a few months, valuation worth thousands of crores of rupees was erased.
What does the company do?
This company, started by Alakh Pandey, has traveled from a YouTube channel to an edtech platform. Started in 2016, this startup quickly gained recognition in the field of online education. Market experts believe that before investing in any IPO, it is important to understand the company’s fundamentals, valuation and sector situation. Investing just based on bumper listings or initial surge can be risky.
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