New Delhi | Jagran Business Desk: Indian digital payments firm Paytm tumbled over 27 per cent on its maiden day of trade on Thursday, with investors questioning its lack of profits and the lofty valuations it gained in the country's largest-ever IPO.
Despite fears that Paytm's market debut might be less than stellar, its steep plunge was astonishing, as shares changed hands at 1,614 rupees in afternoon trade versus the offer price of 2,150 rupees, valuing the firm at about $14.2 billion. Then shares hit the lower circuit limit of 1,564 rupees on the Bombay Stock Exchange, which restricts purchases by investors to only that price or higher.
Reacting to the huge loss, Chairperson of Mahindra Group, Anand Mahindra tweeted "My heart goes out to individual IPO investors who must be rattled but I’m sure Paytm will find its right level. There is, however, a silver lining to this sobering debut: it could moderate the casino-like feeding frenzy for IPO listings & help restore the hunt for true value."
My heart goes out to individual IPO investors who must be rattled but I’m sure Paytm will find its right level. There is, however, a silver lining to this sobering debut: it could moderate the casino-like feeding frenzy for IPO listings & help restore the hunt for true value. https://t.co/TDDF4t2TCI— anand mahindra (@anandmahindra) November 18, 2021
Here are ten things to know about Paytm's weak listing:
1. Paytm's ₹18,300 crore IPO was oversubscribed 1.89 times on the last day of India's biggest share sale last week.
2. The shares tumbled over 27 per cent during the day from the issue price of ₹2,150. The stock was listed at ₹1,955, slipping 9 per cent from the issue price on the BSE. It then tumbled 27.25 per cent to ₹1,564 during the day
3. Despite the dip in Paytm shares the company clocked the valuation of over ₹ 1 lakh crore.
4. Experts highlighted Paytm's expensive valuations as the reason behind the fall in stock price on its first trading session.
5. Paytm's IPO consisted of a fresh issue of ₹ 8,300 crore and an offer for sale (OFS) by existing shareholders worth ₹ 10,000 crore
6. Paytm allocated shares worth ₹ 8,235 crore to more than 100 institutional investors. It included the government of Singapore.
7. 122 institutional investors bought interest on more than 3.83 crore shares to Paytm for ₹ 2,150 apiece, according to a regulatory document dated November 3.
8. Paytm's success has turned a school teacher's son, into a billionaire with a net worth of $2.4 billion according to Forbes.
9. Paytm, backed by China's Ant Group and Japan's SoftBank, grew rapidly after Uber listed it as a quick payment option in India.
10. The company has now expanded into a plethora of services - insurance and gold sales, movie and flight ticketing, bank deposits and remittances.
(With inputs from Reuters)
Posted By: Sugandha Jha