Paytm’s Market Cap At INR 83,845 Cr; Share Price Below INR 1,300

SUMMARY

So far, it has hit an all time low of INR 1,283 per share

Its market cap is way below its pre IPO valuation of $16 Bn

On Thursday, it made its stock market debut and got listed at a discount of over 9% from its issue price of INR 2,150

The share price of Paytm continued to decline further on its second trading day and is currently trading below the INR 1,300 mark.

Around 12 noon, Paytm’s shares on the BSE were trading at INR 1,293.30, lower by INR 270.85, or 17.32 % from its previous close of INR 1,564.15.

So far, it has hit an all-time low of INR 1,283 per share.

Paytm’s market capitalisation has substantially declined to INR 83,825.03 Cr ($11.26 Bn); which was INR 1.01 Lakh Cr ($13.64 Bn) at the end of the first session.

Understandably, the market cap is way below its pre IPO valuation of $16 Bn. It is here to be noted that the fintech giant was valued at $16 Bn when it raised $1 Bn in 2019 in a funding round led by US asset manager T Rowe Price.

Prices of the digital payments giant have been on a correction since its listing over concerns of high valuation.

On Thursday (November 18th), One97 Communications, which owns Paytm made its stock market debut and got listed at a discount of over 9% from its issue price of INR 2,150.

On November 3rd, Paytm raised INR 8,235 Cr ($1.1 Bn) in India’s largest-ever anchor round.

The listing was 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. Its offer during November 8–November 10 was subscribed 1.89 times.

The large size of the offer also played a role in slowing the pace of subscription, analysts said.

The company fixed the price band of INR 2,085–INR 2,150 for the IPO, which included a fresh issue of INR 8,300 Cr worth of shares and an offer for sale (OFS) of INR 10,000 Cr.

Market analysts are of the view that in the long haul, investors should remain invested in the company for better returns.

On Sunday, the company said that the growth momentum in gross merchandise value (GMV), a key economic indicator in its business model, continued in October 2021. The GMV was driven by festive season spends, increase in number of merchants and consumers, adoption of new products, transactions for both online and in-store merchants, and in deployed devices.

GMV processed through Paytm’s platform for the month of October 2021 aggregated to approximately INR 83,200 Cr ($11.2 billion), growth of 131% over the month of October 2020.

Although running into losses, Paytm witnessed a 62% growth in its revenue from operations during Q1 FY22 at INR 890.8 Cr, backed by strong growth from payment and financial services. Its net loss for the quarter increased 34% to INR 381.9 Cr, from INR 284.4 Cr during the corresponding quarter of FY21.

Founded by Vijay Shekhar Sharma in 2000, One97 Communications 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.