Heavy Interest From Anchor Investors Fail To Lift Price Of Paytm’s Unlisted Shares

The much awaited initial public offering (IPO) of One 97 Communications, the parent company of Paytm, opens on Monday (November 8) at the price band of INR 2,085 – INR 2,150.

As the mega IPO aimed at raising a massive INR 18,300 Cr nears, investors have turned cautious and trading volumes have also turned thin in the grey market. 

The unlisted shares are currently trading at a price of INR 2,300-2,575 per share, compared to around INR 2,650 – INR 2,700 last week.

The prices have declined since the announcement of the price band (INR 2,085 – INR 2,150).

Traders are of the view that the valuation and profitability concerns may keep the investor interest subdued in the much talked about public offering.

“Large IPO size, concerns on profitability and valuations are the factors which may dampen the investor enthusiasm,” Manan Doshi, Cofounder, Unlisted Arena told Inc42.

Grey market premiums suggest that its shares may get listed at a premium of INR 150-200 compared to the IPO price band, traders said.

Sandeep Ginodia, CEO, Altius Investech said that the trading volumes have been largely thin amid the festive season and the weekend also played its role in the tepid trade volumes on Saturday.

Shares of the digital payments decacorn surged tremendously in the past few months post the bumper listing of Zomato and touched as high as INR 3,600 per share.

The much-awaited IPO of One 97 Communications, which runs the digital payments giant Paytm, will open on November 8th and close on November 10th.

The offer includes a fresh issue of INR 8,300 Cr worth of shares and an offer for sale (OFS) of INR 10,000 Cr.

On Wednesday, Paytm raised INR 8,235 Cr ($1.1 Bn) from anchor investors in India’s largest anchor round. The anchor round was oversubscribed 10 times. 

Some of the key investors participating in this round include Blackrock, with INR 1,045 Cr investment, CPPIB (INR 938 Cr), Birla MF invested (INR 555 Cr) and GIC (INR 533 Cr)

Global mutual funds — Vanguard, Fidelity and emerging markets dedicated investors – Standard Life Aberdeen, UBS, RWC; and global tech / fintech-focused funds like Sands Capital, Alkeon, Marshall Wace, Viking, Citadel also participated in the anchor round.

The Delhi NCR based fintech company plans to go public at a valuation of $19.5 Bn – $20 Bn. It was valued at $16 Bn when it raised $1 Bn from Ant Financials, SoftBank Vision Fund.

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.

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