Since the turn of the year, the Indian stock markets have echoed the bearishness of early 2022, especially for India Internet stocks. To put it simply, the sector—tracked by the NIFTY India Internet & E-commerce Index, which we have written about previously—has been hammered.

Since 8 January 2025, more than 70% of the stocks in this sector have continuously seen negative monthly returns. This has caused many market watchers to bandy about alarmist terms like “crash” and “sell-off” when describing the current public market fortunes of large-cap India Internet stocks like Zomato, PB Fintech, Swiggy, PayTM.

The hysteria isn’t entirely unwarranted. For instance, Swiggy, which saw its share price touch Rs 556.45 on January 2—its zenith for the ongoing calendar year—has since seen its share price fall to just 331—a 40% fall—as of April 1. Its rival Zomato, which was showered with investor love throughout 2024 for flirting with profitability in a space notorious for high losses, has also seen its share price fall by over 26%, year-to-date (YTD).

The performance of other major India Internet stocks such as PB Fintech (down 28.5% YTD), Paytm (down 18.9% YTD), and Firstcry (down 43.5% YTD) have only furthered the sell-off narrative.

However, there is a difference between prices being down and a sell-off. Prices could fall even if a small number of a company’s shares keep trading down. A sell-off, on the other hand, happens when there is a massive change in expectations around a company and a significant share of its stock changes hands.

With that in mind, relative to history, how significantly have India Internet stocks changed hands in the past two months, and does this support the fatalistic “sell-off” narrative?

Setting a benchmark

It’s easy to see the trendline of a company’s share price emblazoned in red and imagine the worst. However, a dispassionate analysis is necessary to accurately gauge the true sentiment of public market investors.

To do this, we devised an experiment. First, we curated 13 India Internet stocks based on a minimum level of liquidity and some depth of analyst coverage and devised two novel measures to measure how bad the sell-off has been in the first few months of this year.