Paytm’s weak debut: Founder Vijay Sharma says ‘no indicator of company’s value’

Paytm founder Vijay Shekhar Sharma doesn’t feel bogged down by more than 27 per cent plunge of the company’s stock on the maiden day of its listing. As the markets closed at around 3:30pm on Thursday, Shares of One97 Communications Ltd, Paytm’s parent company, tumbled, marking one of the worst opening days for a blockbuster tech listing since the dot-com bubble.

Watch: How Vijay Shekhar Sharma cried during listing

But Sharma struck a defiant note and appeared optimistic of the future.

“I’ve never felt more excited, optimistic and enthusiastic about the future,” Bloomberg quoted the 43-year-old as saying in an interview just as Paytm shares sank on Thursday. “The slump is no indicator of the value of our company,” he added.

“We are in it for the long haul,” Sharma said. “We’ll put our heads down and execute.”

The stock registered a fall of over 27 per cent from the issue price of 2,150. It got listed at 1,955 and then ended the day at 1,564.

So what went wrong? According to Zerodha co-founder Nikhil Kamath, Paytm pushed up both the price and the size of the stock offering to the breaking point.

“There has been a euphoria around IPOs in India, supported by the bull-run in stocks and people got carried away by it,” said Kamath. “For Paytm, the runway for their profitability is too long and doesn’t justify the far-fetched pricing.”

The company commanded a market valuation of 1,01,399.72 crore on the BSE. With the decline in the stock price, the company’s market valuation eroded by 37,600.28 crore.

In traded volume terms, 10.06 lakh shares were traded at the BSE and over 2.39 crore shares at the NSE during the day.

Ant Group-backed 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.

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Jitendra Kumar

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