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Paytm’s IPO consisted of a fresh issue of ₹8,300 crores and an Offer For Sale worth ₹10,000 crores.
Shares of One 97 Communications, the parent of digital payment company Paytm, made a weak stock market debut on Thursday. The stock opened for trading at ₹1,950 on the NSE (National Stock Exchange), marking a decline of 9.3 per cent or ₹ 200 from its issue price of ₹2,150. Paytm shares losses after opening as the stock fell as much as 25 per cent, from the issue price, to hit an absolute low of ₹1,655.
Ten things to know about Paytm’s weak listing:
1. Paytm’s ₹18,300 crore IPO, which was the country’s largest, was subscribed 1.89 times last week. On the BSE(Bombay Stock Exchange), Paytm stock opened for trading at ₹1,955.
2. Despite the dip in Paytm shares on debut the company garnered a valuation of over Rs 1 lakh crore.
3. Analysts concluded that Paytm’s expensive valuations are the reason behind the fall in stock price on its first trading session.
4. Analysts at Macquarie Research-informed clients that Paytm’s business model lacked “focus and direction” and initiated coverage with an under-performing “Achieving scale with profitability a big challenge,” they said, calling the company a “cash guzzler”.
5. Paytm’s IPO consisted of a fresh issue of ₹8,300 crores and an OFS by existing shareholders worth ₹10,000 crores.
6. Paytm allocated shares worth ₹8,235 crores to more than 100 institutional investors, including the government of Singapore, ahead of the country’s largest stock market listing.
7. Paytm preserved interest from 122 institutional investors who bought more than 3.83 crore shares for ₹2,150 apiece, according to a document dated November 3.
8. Vijay Shekhar Sharma founded Paytm in 2010 as a platform for mobile recharges. The company grew quickly after the cab service app uber listed it as a quick payment option in India and its use expanded further in late 2016 due to demonetization.
9. Paytm’s success has turned Sharma, a school teacher’s son, into a billionaire with a net worth of $2.4 billion according to Forbes. Its IPO has also made hundreds of new millionaires in a country where per capita income is below ₹2,000.
10. As of 11:30 am, Paytm shares traded 25 per cent lower from the issue price at Rs 1,676.