India's largest IPO makes bleak debut
New Delhi: Shares of One97 Communications Ltd, Paytm's parent company, on Thursday made a weak market debut and tumbled over 27 per cent during the day from the issue price of Rs 2,150. The stock was listed at Rs 1,955, slipping 9 per cent from the issue price on the BSE. It then tumbled 27.25 per cent to Rs 1,564 during the day.
On the NSE, it debuted at Rs 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 Rs 1,562. "Paytm, the biggest IPO in India so far debuted the secondary market on a weaker note as compared to our expectations of a flat listing," Santosh Meena, Head of Research, Swastika Investmart Ltd, said.
The company commanded a market valuation of Rs 1,01,484.00 crore in late afternoon trade on the BSE. Ant Group-backed Paytm's Rs 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 Rs 15,000 crore offer a decade back.
"Paytm, formally called One97 Communications debuts today at exchanges which saw a dull response and got subscribed only 1.89 times from the investors which is much lower compared to the other recently listed companies," Parth Nyati, Founder, Tradingo said.
He added that they feel that due to the brand the company sought high valuation and it might see a correction in the near term.
The initial public offering of Paytm's parent company One97 Communications Ltd received bids for 9.14 crore equity shares against the offer size of 4.83 crore shares, according to information available with stock exchanges on November 10. Paytm had fixed its IPO in a price band of Rs 2,080-2,150 per share. Incorporated in 2000, One97 Communications is India's leading digital ecosystem for consumers and merchants. It offers a range of services, including payment services and financial services. Launched by a son of a school teacher from a small town Aligarh nearly a decade ago as a platform for cellular recharging, Paytm grew rapidly after ride-hailing agency Uber listed it as a fast cost possibility.