The parent company of the digital payments major Paytm, One97 Communications has been on a continuous free fall since its listing on the Indian exchanges on Nov 18, 2021.
At the time of listing in November last year, Paytm’s market capitalization was a little over Rs 1.39 lakh crore at the issue price of Rs 2,150, however this value has been swiftly eroded to Rs 47,844 crore, as of Tuesday, March 8.
This means that in just about 3 months or more, the market cap of Paytm has fallen under the Rs 50,000 mark, sharply falling by 65.6% in the period.
Paytm’s Market Valuation Falls Under Rs 50,000 Crore
The ongoing Russia-Ukraine crisis is affecting the global economy in all respects, especially with the wild swings in the value of oil prices, breaking records and touching multiple year highs.
As much as it is crippling global economies, such geopolitical tensions are impacting the Indian economy on a serious note too.
The domestic market has been witnessing a continuous downfall since the past 4 days due to massive selling caused by the uncertainties and inflation worries put in place by the Russia-Ukraine crisis.
As a result of this, Paytm shares have further suffered sell-offs, as it had been performing poorly even before the war.
Shares of the fintech firm ended over 2% on Tuesday, with a market capitalization of Rs 47,844 crore, falling under the Rs 50,000 crore mark.
Paytm’s Valuation Eroding Continues
Paytm 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 and ended the day 27.4% lower.
Paytm is is the country’s biggest IPO so far, while the fourth biggest IPO globally, with a valuation of Rs 18,300 crore.
The stock plummeted further on the second day, and declined 10% more and lost Rs 50,000 crore of its market capitalization in the second day of its listing. In two days since its listing, the stock dived about 37%.
The stock’s IPO turned out to be overvalued and so investors booked profits. However, despite declining 50% from its issue price of Rs 2,150, the stock free fall shows no relief.
Paytm’s listing spooked investors after renowned foreign brokerage Macquarie’s hawkish tone on the overvaluation of the stock to be listed.
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