Shares of One 97 Communication, the parent company of digital mobile payment platform Paytm, got listed on the stock market today.
Paytm was listed on the Bombay Stock Exchange at Rs 1,955 and on the National Stock Exchange at Rs 1,950.
That is, it is listed 9% lower than its price in the IPO. At present, investors have suffered a loss of Rs 350 per share. Right now it is down by 13%.
Shares is Trading at Rs 1,805
However, later this stock was trading at Rs 1805 with a fall of 8%. It made a low of Rs 1,657 and a high of Rs 1,961.
Its market cap stood at Rs 1.16 lakh crore. Whereas before listing the estimate was Rs 1.48 lakh crore. Surprisingly, this stock could not even touch its issue price.
The stock has been the worst performer in the recent past, both in terms of subscription and listing of the issue.
May Drop by 44%
Brokerage house Macquarie has said that Paytm's stock may decline by 44% from here. This share can go up to Rs 1,200.
This means that investors are likely to get losses in this in future also. It has said that making profit for the company is a big challenge for it. Along with this, regulation and competition are also a matter of concern for this.
Valuation is too Expensive
The valuation of Paytm is quite expensive. It has said that the Reserve Bank may soon bring regulation on Buy Now, Pay Later for Fintech.
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This brokerage house said that since its inception, Paytm has raised an amount of 19 thousand crores.
All this money is currently in loss. Paytm's initial public offer (IPO) of Rs 18,300 crore is the biggest IPO in the country so far.
The company raised Rs 8,300 crore by issuing fresh equity shares and the existing shareholders and promoters sold shares worth Rs 10,000 crore.
IPO Subscribed 1.89 Times
Paytm's IPO was subscribed 1.89 times. The company had received bids for 9.14 crore shares against 4.83 crore shares.
This was largely due to the support of Qualified Institutional Buyers (QIBs). QIB's quota in the IPO was subscribed 2.79 times.
At the same time, the quota of retail investors was filled 1.66 times. The quota of non-institutional buyers was filled only 24%.
Allotment at Rs 2150 per share
Paytm shares have been allotted at Rs 2150 per share. The premium of the share in the gray market is Rs 20-25 less than the allotment price.
Paytm's weakness is in stark contrast to the recent trend seen among startups such as PB Fintech and FSN E-commerce Ventures, which made stellar debuts in the stock market.
Where will the company use this money?
The company has said that out of the money raised through the IPO, Rs 4,300 crore will be used to strengthen its payment ecosystem.
The company will provide more facilities to its merchants and customers on technology and financial services.
The company will use Rs 2,000 crore for new business initiatives and strategic partnerships. The rest of the amount will be used for general corporate purposes.