Paytm IPO, India’s Biggest Till Date, Crashes Over 27% On Day 1; Investors Lose Rs 35,0000 Crore Within Few Hours

The parent company of the digital payments major Paytm, One97 Communications debuted on the Indian bourses on November 18 but was listed at a discount of 9.3% against its issue price of Rs 2,150, at Rs 1,950 per share on the National Stock Exchange.

By the end of Thursday’s session, the digital payments stock had plummeted 27.4% to Rs 1,560.80 per share. One97 Communications is the country’s biggest IPO so far, while the fourth biggest IPO globally, with a valuation of Rs 18,300 crore. However, the listing could not be on par with the investors’ estimates.

Paytm Plunges Over 27% on First Day of Listing

Paytm’s Rs 18,300 crore worth IPO backed by Chinese fintech giant Ant Group was oversubscribed 1.89 times on its last day of issue. While the net qualified institutional investors subscribed 2.79 times for the company’s shares, the non-institutional investors (NIIs) subscribed only 24% of their quota. Retail investors were seen subscribing 1.66 times the shares on offer.

Bids for a total of 9.14 crore equity shares were placed for the fintech platform’s listing, against the offer size of 4.83 crore shares. The price band fixed by the company was Rs 2,080 to Rs 2,150 per share.

Due to weak response from the investors, Paytm’s performance on the first day in the Indian bourses was poor. The stock fell over 27% by the end of the session on Thursday. It also hit its lower circuit limit of Rs 1,564 on the BSE during late afternoon deals. 

This means that the investors are restricted to purchase the share(s) only at the circuit limit price or higher. It was listed 9.3% lower than its issue price at Rs 1,950/share.

Paytm CEO In Tears on the Stock’s Listing Day

Paytm Founder & CEO Vijay Shekhar Sharma turned emotional while his addressal in the Bombay Stock Exchange, on the fintech major’s market debut on Thursday. 

“India is made for stories like that of Paytm. I hope that our story can inspire many budding entrepreneurs. One day does not decide what our future is,” said Sharma.

He was quoted by Reuters saying, “It is a new business model and it takes a lot for somebody to understand it straightforwardly. There is a lot for us to bring to the markets and the market participants.”