Paytm crashes over 27% on market debut

Paytm had fixed its IPO in a price band of Rs 2,080-2,150 per share. (Representative image)NEW DELHI: Digital payment company Paytm’s initial public offering (IPO) made a weak debut at the markets on Thursday as the stock crashed over 27 per cent. With a valuation of Rs 18,300 crore, the IPO is the biggest so far in India and the fourth biggest globally by any such firm. In fact, the stock hit its lower circuit limit of Rs 1,564 on the BSE during late afternoon deals. When a stock hits its lower circuit limit, purchases by investors are restricted only to that price or higher. It was listed at Rs 1,955, slipping 9 per cent from the issue price on the BSE. It then tumbled 27.25 per cent to Rs 1,564 during the day. On the NSE, it debuted at Rs 1,950, registering a decline of 9.30 per cent against the issue price. During the day, the stock plunged 27.34 per cent to end at Rs 1,560. CEO breaks down during listing ceremonyIt was an overwhelming occasion for founder and CEO Vijay Shekhar Sharma who broke down during the opening ceremony. “India is made for stories like that of Paytm. I hope that our story can inspire many budding entrepreneurs,” he said. With an aspiration to bring over half a million people to the mainstream of Indian economy through its fintech platform, Sharma expressed gratitude to all stakeholders of the company who made this journey possible. Unperturbed by the slide, Sharma remained optimistic and said that he did not regret listing in India. “One day does not decide what our future is,” he said. “It is new business model and it takes a lot for somebody to understand it straightforward… there is a lot for us to bring to the markets and the market participants,” he told news agency Reuters. Tepid response to its IPO The Ant Group-backed Rs 18,300 crore IPO was oversubscribed 1.89 times on the last day. It received bids for 9.14 crore equity shares against the offer size of 4.83 crore shares, according to information available with stock exchanges on November 10. Paytm had fixed its IPO in a price band of Rs 2,080-2,150 per share. The company raised $1.1 billion from institutional investors and last week it received $2.64 billion worth of bids for the remaining shares on offer. How it all began Incorporated in 2000, One97 Communications is India’s leading digital ecosystem for consumers and merchants. It offers a range of services, including payment services and financial services. Paytm grew rapidly after ride-hailing agency Uber listed it as a fast cost possibility. Paytm’s success has turned Sharma, a school teacher’s son, into a billionaire with a net worth of $2.4 billion according to Forbes. Its IPO has also minted hundreds of new millionaires in the country. The company reported a loss of Rs 382 crore ($51.5 million) in the quarter ended in June, wider than a loss of Rs 284 crore for the same period last year. But Sharma said the company could turn profitable when it did not need to invest “so much more” to fuel growth opportunities. “That’s the quarter that you will call break-even,” he added. “But that break-even will not mean that we are perpetually going to say the same.” (With inputs from agencies)FacebookTwitterLinkedinEMail

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