SUMMARY
Paytm had raised INR 8,235 Cr ($1.1 Bn) from anchor investors in India’s largest anchor round
Since its weak listing, shares of Paytm have been through a roller coaster ride touching an all time high of INR 1,961.05 and a low of INR 1,271.25 per share
Its GMV for the October-November period of FY22 stood at INR 1.66 Lakh Cr, registering a year-on-year growth of 129%
Shares of Paytm declined as much as 13.22% today (December 15th, 2021) as the lock in period for anchor investors ended.
The fintech giant’s shares fell below the INR 1,300 mark and touched an intra-day low of INR 1297.70 per share.
They have, however, recovered from the day’s lows and around 12.20 p.m, the shares on the BSE were trading at INR 1,417.80, lower by INR 77.65 or 5.19% from its previous close.
The end of the lock-in period is generally expected to result in the decline of share prices as anchor investors tend to sell their shares to book profits.
Parth Nyati, founder, Tradingo on Paytm said, “Following a sharp decline after the lock-in period ended for anchor investors, Paytm is finding buying interest at lower levels. However, 1,700 may act as a supply point and it may remain in the 1300-1700 range until the market determines its right value.”
He added that if the shares manage to sustain above INR 1,700 level it may see further buying interest while it might find strong support between INR 1,200-1,300 range.
“If Paytm manages to emerge as a leader in a particular business then it will be possible to expect buying interest at lower levels otherwise it may take many years to reach its peak valuation,” Nyati added.
Since its weak listing on November 18, shares of Paytm have been through a roller coaster ride touching an all time high of INR 1,961.05 and a low of INR 1,271.25 per share.
Anchor Investors
Paytm had raised INR 8,235 Cr ($1.1 Bn) from anchor investors in India’s largest anchor round. The anchor round was oversubscribed 10 times by 74 investors, out of which 21 investors had bids greater than INR 100 Cr.
Some of the key investors participating in the anchor round were Blackrock with an investment of INR 1,045 Cr, CPPIB (INR 938 Cr), Birla MF (INR 555 Cr), GIC (INR 533 Cr)
Global mutual funds – Blackrock, Vanguard and Fidelity; emerging markets dedicated investors – Standard Life Aberdeen, UBS, RWC; and global tech / fintech-focused funds like Sands Capital, Alkeon, Marshall Wace, Viking, Citadel participated in the anchor round.
Government of Singapore, CPPIB, ADIA, APG, City of New York, Texas Teachers Retirement, NPS Japan, University of Texas, NTUC Pension out of Singapore, the University of Cambridge among others also invested in the IPO.
Growing GMV
On Monday, the NCR-based digital payments major said that its gross merchandise value (GMV) for the October-November period of FY22 stood at INR 1.66 Lakh Cr, registering a growth of 129% compared to the same period of the last financial year (FY21).
Its GMV during the first two months of Q3FY21 was INR 72,800 Cr.
In a regulatory filing, the recently listed company said that the number of loans through its platform increased by 414% on a year-on-year (YoY) basis to 27 Cr loans in the first two months of the quarter. Value of loans disbursed through the platform increased by 375% year-on-year to Rs 1,320 Cr ($178 Mn) in the first two months of the quarter.
Paytm’s Financials
On November 27th, 2021, One97 Communications, which owns Paytm reported a 63.6% increase in its revenue from operations during the July-September quarter at INR 1,086.4 Cr.
The fintech giant had attributed the jump in revenue to a 52% growth in non UPI payment volumes (GMV) and more than three-times growth in financial services and other revenue.
Its net losses for the second quarter of FY22, however, widened by 8.42% to INR 473.5 Cr during July-September quarter, from INR 436.7 Cr reported a year ago.
Lock-In Norms
According to SEBI norms, an anchor investor, who is a qualified institutional buyer, cannot trade their shares till 30 days after the listing so that individual retail investors do not suffer.
The securities market regulator last month proposed a 90-day lock-in for anchor investors.
It said that the Primary Market Advisory Committee (PMAC) was of the view that instead of increasing the lock-in period for all anchor investors from 30 days, half of the anchor book should be given to those anchor investors who agree to the 90 days or a longer lock-in period.
“It is felt that a longer lock-in for Anchor Investors will provide more confidence to other investors. Therefore, there may be a need to review the period of lock-in for anchor investors,” SEBI said in a report on November 16.
