NEW DELHI: The much-hyped Paytm IPO made a dismal debut on the bourse on Thursday, listing at a 9% discount and tanking over 20% in the first 15 minutes of trading.
The scrip tumbled further to close at Rs 1,564 on the BSE, 27% lower than the issue price of Rs 2,150.
The crash shocked even the most pessimistic of market analysts as it wiped out Rs 38,000 crore in investor wealth and the firm’s market cap slipped to Rs 1.01 lakh crore from Rs 1.39 lakh crore at issue price.
The Vijay Shekhar Sharma-led firm’s flop show comes after its IPO, India’s biggest at Rs 18,300 crore, struggled to get a good response — it was subscribed only 1.89 times, much lower than other recent IPOs like Nykaa and Zomato that got listed at a premium of 79% and 53%, respectively.
The dull response to the Paytm IPO shows investors are not buying the huge valuation the loss-making company and its investors are seeking.
Most analysts don’t expect Paytm to bounce back in the near term though the firm’s founder and CEO Sharma claims otherwise.
Global research firm Macquarie has placed an underperform rating on One 97 Communications, the parent company of Paytm, as it believes the business model lacks ‘focus and direction’.
It even called Paytm a ‘cash guzzler’ and has kept a target price of Rs 1,200, which is 44% lower than the issue price.