Paytm crashes more than 27% in market debut: Key things to know

The country’s largest digital payments provider, Paytm, lost more than a quarter of the value on its maiden day of trade on Thursday. As the markets closed at around 3:30pm, Shares of One97 Communications Ltd, PayTM’s parent company, tumbled 27.25 per cent, marking one of the worst-ever debuts by a major technology company.

Speaking on the crash, CEO Vijay Shekhar Sharma said he was unperturbed by the slide and did not regret listing in India, according to a report by Reuters. “One day does not decide what our future is,” the CEO said.

“It is a new business model and it takes a lot for somebody to understand it straightforward… there is a lot for us to bring to the markets and the market participants,” it also quoted Sharma as saying.

According to Shifara Samsudeen, a LightStream Research analyst, “Paytm’s financials are not very impressive and the growth prospects seem limited… obviously, the company lacks a clear path to profits,” Reuters reported.

Here are key things to know about the crash:

>Paytm’s 18,300 crore IPO was oversubscribed 1.89 times on the last day of India’s biggest share sale last week.

>This was greater than miner Coal India’s 15,000 crore offer a decade back.

> The shares tumbled over 27 per cent during the day from the issue price of 2,150. The stock was listed at 1,955, slipping 9 per cent from the issue price on the BSE. It then tumbled 27.25 per cent to 1,564 during the day.

> On the NSE, it debuted at 1,950, registering a decline of 9.30 per cent against the issue price. During the day, the stock plunged 27.34 per cent to 1,562.

> After today’s crash, the company’s market valuation falls to 1,01,484.00 crore on the BSE.

> Paytm, backed by China’s Ant Group and Japan’s SoftBank, grew rapidly after Uber listed it as a quick payment option in India.

>The company has now expanded into a plethora of services – insurance and gold sales, movie and flight ticketing, bank deposits and remittances.

(With agency inputs)

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Jitendra Kumar

Jitendra Kumar Born on October 10, 1990 an Indian author and activist from Hathras in Uttar Pradesh.