NEW DELHI: Paytm’s Rs 18,300-crore IPO on Wednesday was oversubscribed 1.89 times with foreign institutional investors flooding the issue with offers even as domestic mutual funds and high net worth individuals largely stayed away from the initial public offering. The company is likely to debut on the stock exchange on 18 November. The IPO received bids for 9.13 crore equity shares against an offer size of 4.83 crore shares. The portion set aside for retail investors was subscribed 1.66 times, while the reserved portion of non-institutional investors was subscribed 24 per cent, and qualified institutional buyers put in bids 2.79 times the portion set aside for them. QIBs include foreign institutional investors, banks, financial institutions, insurance companies, mutual funds and others. Around 99% of the IPO’s institutional demand came from foreign investors who bid for 7.2 crore shares, while large domestic investors such as insurance companies and mutual funds barely participated in the open offer. A few domestic institutions had participated in the earlier investment round. Some media reports suggested that the Canada Pension Plan Investment Board (CPPIB), which had invested in the anchor round of the IPO, has increased its subscription. The fund had also taken part in the IPO’s anchor round Last week. Paytm raised Rs 8,235 crore from anchor investors, with the anchor round oversubscribed 10 times. Surprisingly, domestic mutual funds cumulatively bid for only 348,828 shares of the 48.4 million on offer to investors, while HNIs bid for only 31,53,438 shares of the 1,31,97,115 on offer. This implies that the reserved portion of non-institutional investors was subscribed only 24 per cent. This was one of the lowest participation from mutual funds and HNIs in an IPO in recent months. Even Zomato saw strong participation from domestic mutual funds which applied for 1.9 billion shares of Zomato, though institutional investors were offered around 389 million shares. Similarly, in the case of Nykaa, mutual funds applied for 81.6 million of the 14.3 million shares on offer for qualified institutions. Also, food delivery start-up Zomato’s IPO was oversubscribed more than 38 times and its shares are up around 79% from the offer price, while e-commerce beauty platform Nykaa saw demand for 82 times the number of shares on offer. However, both Zomato and Nykaa are much smaller companies than Paytm. One97’s shares are likely to be priced at the higher end of its offered price range of Rs 2,080 to Rs 2,150, which would value the company at around $20 billion. “We are overwhelmed with the outstanding response to the Paytm IPO shown by institutional investors, financial giants, mutual funds and of course, retail investors. At Paytm, our ethos has always been to offer technology and financial services that can give power to citizens to improve their lives, help merchants grow their businesses, and impact our communities in positive ways. We hope to continue to strive and drive financial inclusion for the underserved and unserved population of the country,” the company said in a statement. India’s largest IPO has received a mixed response from analysts. While some have termed it as a good bet to ride the fintech wave in India, others are concerned about the company’s valuation and have termed it as ‘expensive’ for a firm that has reported losses for the last eight years. “The company is seeking a valuation of $20 billion at a 49 times price to FY21 sales. Considering the current operating matrix, the valuation seems expensive. Considering long-term growth perspective, current financial parameters, and rich valuations, only risk-tolerant investors with a medium to long-term horizon should subscribe to the offer,” said Yesha Shah, Research head, Samco Securities. Aswath Damodaran, professor of finance, Stern School of Business, New York University, wrote on his 4 October blog that given almost all of the value of Paytm comes from future expectations, and there is significant uncertainty on every dimension, it should come as no surprise that the range on estimated value is immense, with a 3% chance that the firm’s equity is worth nothing more than Rs 2 trillion (approx $27 billion) at the 90th percentile.