Paytm had fixed its IPO in the price band of Rs 2,080-2,150 per share. (representative image)
New Delhi: Digital payments company Paytm’s initial public offering (IPO) made a weak start in the markets on Thursday as the stock fell over 27 per cent.
With a valuation of Rs 18,300 crore, the IPO is the largest ever in India and the fourth largest globally by any such firm.
In fact, the stock hit its lower circuit limit of Rs 1,564 on BSE during the afternoon deals. When a stock hits its lower circuit limit, buying by investors is limited only to that price or higher.
It was listed on the BSE at Rs 1,955, down 9 per cent from the issue price. During the day, it fell 27.25 per cent to Rs 1,564.
On the NSE, it opened at Rs 1,950, registering a decline of 9.30 per cent against the issue price. The stock closed at Rs 1,560, down 27.34 per cent during the day.
CEO breaks down during listing ceremony
It was a tremendous opportunity for founder and CEO Vijay Shekhar Sharma, who broke down during the opening ceremony.
“India is made for stories like Paytm. I hope our story can inspire many budding entrepreneurs,” he said.
With an aspiration to bring over half a million people into the mainstream of the Indian economy through his fintech platform, Sharma expressed his gratitude to all the stakeholders of the company who made this journey possible.
Upset by the slide, Sharma remained optimistic and said that he does not regret being listed in India.
“One day doesn’t decide what our future holds,” he said. “It’s a new business model and it takes a lot for someone to understand it directly … there’s a lot for us to bring to markets and market participants,” he told Reuters news agency.
Strong reaction to its IPO
The Rs 18,300-crore IPO backed by Ant Group was subscribed 1.89 times on the last day.
As per information available with the stock exchanges on November 10, it received bids for 9.14 crore equity shares against an offer size of 4.83 crore shares.
Paytm had fixed its IPO in the price band of Rs 2,080-2,150 per share.
The company raised $1.1 billion from institutional investors and last week received bids for $2.64 billion for the remaining shares on offer.
how it all started
Incorporated in 2000, One97 Communications is India’s leading digital ecosystem for consumers and merchants.
It provides a wide range of services, including payment services and financial services.
Paytm grew rapidly after ride-hailing agency Uber listed it as a high cost potential.
According to Forbes, the success of Paytm has made Sharma, the son of a school teacher, a billionaire with a net worth of $2.4 billion.
Its IPO has also created hundreds of new millionaires in the country.
The company reported a loss of Rs 382 crore ($51.5 million) for the quarter ended June, up from a loss of Rs 284 crore in the same period last year.
But Sharma said the company can be profitable when it doesn’t need to invest “so much” to spur growth opportunities.
“That’s the quarter you’d call break-even,” he said. “But that break-even won’t mean we’re always going to say the same thing.”
(with inputs from agencies)
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