NEW DELHI: Stock of Paytm (listed as One 97 Communications) fell sharply for the second straight session on Monday, wiping out investors wealth by as much as Rs 55,000 crore in two sessions.
Paytm shares slipped 17 per cent to Rs 1,289 (at 12.01 pm) against previous closing of Rs 1,564.15 on BSE.
Market cap of the firm has now fallen below Rs 85,000 crore as against the m-cap of Rs 1.39 lakh crore before the stock hit the exchanges. With today's fall, the stock of Paytm has crashed over over 40 per cent compared to its IPO issue price of Rs 2,150.
TNIE EDITORIAL | What went wrong with the Paytm IPO
This fall comes even as Paytm, during the weekend, reported that its gross merchandise value — or payments made to merchants through its platform — jumped 131per centto $11.2 billion last month from a year earlier. It also said that number of its monthly transacting users (MTU) grew by over 35per centin October this year to 63 million, compared with 47 million the same month last year.
Shares of Paytm entered the stock exchanges on Thursday at a discount of over 9 per cent and fell over 20 per cent in the first 15 minutes of trading. The stock ended its first session 27 per cent lower at Rs 1,564.
This flop show by Paytm comes after its IPO, India's biggest at Rs 18,300 crore, struggled to get fully subscribed (only 1.89 times). This had raised concerns that the investors are not buying the huge valuation (at around 1.39 lakh crore) of the loss-making company and its investors are seeking. The subscription level, which was much lower than Zomato or Nykaa, had assured Paytm won't have a blockbuster opening.
Global research firm Macquarie has placed an underperforming rating on One 97 Communications, the parent company of Paytm, as it believes the business model lacks ‘focus and direction’. It even called Paytm ‘cash guzzler’ and has kept a target price of Rs 1,200, which is around 44 per cent lower than its issue price.