Paytm’s Unlisted Share Price Value Decline By 17% Post IPO Price Band Announcement

After the announcement of the price band for the IPO, Paytm’s share price in the unlisted market has slumped down. 

The IPO of One 97 Communications, the parent company of fintech major Paytm is set to open on November 8 at the price band of INR 2,085-2,150.

On Thursday, its unlisted shares were trading at INR 2,650 – INR 2,700 lower by 15.6%-17.18% compared to INR 3,200 on Wednesday. 

Market analysts were of the view that the unlisted share prices may take a further dip going ahead owing to a tepid response.

“Unlisted Shares of PayTm which were trading at exorbitant valuations in unlisted space are now witnessing steep correction as expected. As the broader market has dived in deep-red sea, it becomes crucial to watch the subscription of PayTm’s IPO amid shake-off,” said Manan Doshi, cofounder, Unlisted Arena.

Shares of the digital payments decacorn surged tremendously in the past few months post the bumper listing of Zomato. However, valuation concerns lingered among the investors, and trading volumes turned thin last week with share prices around INR 3,600.

With the official announcement of the IPO and the price band (INR 2,085 – INR 2,150), the share price in the grey market has declined.

The parent company of Paytm was earlier looking at a valuation of $25 Bn – $30 Bn with its proposed initial public offering (IPO).

However, it now plans to go public at a valuation of $19.5 Bn – $20 Bn. The fintech giant was valued at $16 Bn when it raised 

During a pre-IPO press conference on Thursday, Madhur Deora, President and Group CFO, Paytm, said that the valuation, which has been pegged at $19.5 Bn – $20 Bn, could have been done at a higher valuation, but the company does not “believe in getting every last dollar of valuation”.

“We want to have really high-quality investors and want to make sure that we create value for the investors that are coming in. Ultimately, We believe that this price band is the right price band to go with,” Deora said.

The IPO will open on November 8th and close on November 10th. Paytm had received SEBI approval for its IPO on October 22nd. 

The Delhi NCR based decacorn has also increased its IPO offer size to INR 18,300 Cr, from its initial offer of INR 16,600 Cr.

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

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