New Delhi | Jagran Business Desk: Digital payments firm Paytm fell 9.2 per cent on Monday, sliding for a second time after a dismal debut for India's largest public offering last week, in which its shares tumbled more than 27 per cent.
The stock was being traded for 1,417 rupees compared to the offer price of 2,150 rupees. The company's debut rout on November 18 raised doubts around impending initial public offerings (IPOs) on the red hot Indian market, including those of its smaller rival MobiKwik and hotel aggregator OYO as valuations come under investor scrutiny.
Here's why Paytm shares are falling
According to experts, Paytm shares could decline further this week after a weak debut as the majority of analysts recommends avoiding the stock. Several domestic institutions are unlikely to buy Paytm's stock, analysts suggest.
"Paytm share prices will remain subdued in the short to medium term as IPO investors will try to exit the stock at every possible rise, and new investors won't touch it till sentiment changes," said Piyush Nagda, head- investment product at Prabhudas Lilladher, as quoted by Economic Times.
Paytm has also seen a host of senior executives resigning in the run-up to its IPO, which has raised questions about management stability.
Paytm, which counts SoftBank and Ant Group among its backers, raised $2.5 billion in its IPO, of which $1.1 billion was from institutional investors.
Engineering graduate Vijay Shekhar Sharma founded Paytm in 2010 as a platform for mobile recharges. It grew quickly after ride-hailing firm Uber made Paytm a quick payment option in India.
Its use swelled further in late 2016 when New Delhi's shock ban on high-value currency notes boosted digital payments. Sharma, who cried with joy at the opening ceremony on Thursday, later told Reuters he was unperturbed by the slide and did not regret listing in India. Separately, on Sunday, Paytm said gross merchandise value processed via its platform in October was about $11.2 billion, up 131 per cent from a year earlier.
(With inputs from Reuters)
Posted By: Sugandha Jha