Paytm Slides 2% On Jio Financial’s Public Listing

Jio Financial Services Limited (JFSL), which many have deemed as one of the potential competitors of fintech giant Paytm, made a lacklustre debut on bourses Monday (August 21). Its shares got listed at INR 265 on the BSE and INR 262 on the NSE, slightly above the discovery price of INR 261.85 apiece.

The shares of the financial services company, carved out of the Mukesh Ambani-led Reliance Industries Ltd (RIL), hit lower circuit on the BSE and ended the day at INR 251.75. 

However, shares of Paytm witnessed some weakness following the listing of JFSL and declined 3.5% to INR 830.05 during the intraday trading today.

It is also pertinent to note that despite the weak listing, JFSL is currently India’s second-largest NBFC after Bajaj Finance, with a total market cap of INR 1,59,943.93 Cr.

Meanwhile, Paytm’s current market cap stands at INR 53,149.79 Cr.

Post listing of JFSL, shares like Paytm and Bajaj Finance were highly watched due to the threat of competition, said Prashanth Tapse, research analyst, senior VP research at Mehta Equities.

Last year, after RIL announced the demerger of its financial services business and the spin-off of Reliance Strategic Investments as Jio Financial Services Ltd, brokerage Macquarie had said that given the company’s large balance sheet, Paytm and Bajaj Finance would be at high risk.

Several other brokerages also expressed a similar opinion and a possible heightened competitive environment for the fintech startups overall. JFSL will largely focus on merchant and customer lending.

Tapse said, “…Paytm is the largest financial product servicing the sector digitally by leveraging the technology-led business model and delivering healthy segmental growth. We expect Paytm would continue to deliver healthy growth going forward despite Jio digital plans.”

“We believe India is in the urge for systematic growth and this needs a stronger and larger financial market which would be served by many more players. The Indian market opportunity is so big and underserved that many more players will come in the next 3-4 years,” he added.

Paytm shares ended today’s session 2.5% lower at INR 837.9 on the BSE.

There have also been reports about JFSL entering the insurance sector. Reportedly, it also approached the Insurance Regulatory and Development Authority of India (IRDAI) for a licence. On the other hand, the company has signed a joint venture with investment giant BlackRock to enter the Indian asset management space.