SUMMARY
Its market capitalisation is currently over INR 1.1 Lakh Cr
The IPO is in the price band of INR 2,085 - INR 2,150
Founded in 2000, Paytm has come a long way from a value-added service provider a fintech giant
In India’s largest ever listing of shares on exchanges, One97 Communications, the parent of Paytm, debuted in the stock market today. Post its weak listing, the market capitalisation of the fintech giant stood at around INR 1.09 Lakh Cr ($14.8 Bn).
Shares of the digital payments giant listed at a discount of 9.06% on the BSE at INR 1,955 per share, compared to the issue price of INR 2,150.
Around 11.10 a.m, the shares were trading on the BSE at INR 1,694, INR 456 or 21.21% from the issue price.
On the National Stock Exchange (NSE), its shares were trading at INR 1,705, 20.7% lower than the issue price. The shares listed on the NSE with a discount of 9.3% of INR 1,950 per share.
The listing was, however, largely on expected lines after a slower than anticipated response to the INR 18,300 initial public offering and persistent concerns of profitability and valuation.
Santosh Meena, Head of Research, Swastika Investmart Ltd said, “Paytm, The biggest IPO in India so far debuted the secondary market on a weaker note as compared to our expectations of a flat listing. The company has a huge customer base with strong brand positioning and it has an early mover advantage in digital payment services. However, it is still a loss-making company and very aggressively priced therefore we saw a tepid response in terms of subscriptions too.”
According to Parth Nyati, Founder, Tradingo, noted that aggressive investors who got the allotment can hold the stock with a long-term view. Yet the investors who applied for listing gain can exit on the bounceback, she added.
“We feel, due to the brand, the company sought high valuation and it might see a correction in the near term,” Nyati added.
Post a moderate response for most of the three-day offer, the IPO was finally oversubscribed (1.89 times) backed by a delayed-but-healthy response from institutional investors on the last day (November 10).
The large size of the offer also played a role in slowing the pace of subscription, analysts said.
The company fixed price band of INR 2,085 – INR 2,150 for the IPO included a fresh issue of INR 8,300 Cr worth of shares and an offer for sale (OFS) of INR 10,000 Cr.
On November 3rd, Paytm raised INR 8,235 Cr ($1.1 Bn), in the largest ever anchor round in India. The anchor round was oversubscribed 10 times, by investors including Blackrock, with INR 1,045 Cr investment, CPPIB (INR 938 Cr), Birla MF invested (INR 555 Cr) and GIC (INR 533 Cr).
Founded by Sharma in 2000, Paytm began its journey as a value-added service provider. It evolved over the years with different fintech solutions to become an online mobile payments firm.
It is the third company from the startup ecosystem to get listed on the stock exchanges of late. Before Paytm, beauty and lifestyle unicorn Nykaa witnessed a bumper listing and Fino Payments Bank listing at a discount earlier.
Another digital payments major Mobikwik, which got the SEBI nod for its INR 1,900 Cr IPO has not yet announced the dates and the price range for its offer.
