Paytm’s Shares Plunge 20% On Indian Exchange Debut

Shares of One 97 Communication Ltd, the firm that operates Paytm, made a lacklustre debut on Indian exchanges on Thursday, crashing 20% in intraday trading.

The stock listed on the National Stock Exchange of India at Rs1,950 ($26.28), a 9.3% discount to its issue price of Rs 2,150 ($28.98) apiece. At 10.25am IST, it was trading at Rs 1,712, down nearly 20.7%.

The Rs 18,300-crore ($2.46 billion) public issue of One97 Communications, the largest ever in India, was subscribed 1.89 times in the price band of Rs 2,080 to 2,150 ($28-$29).

Paytm reported a gross merchandise value (GMV) of Rs 4 trillion (around $50 billion) in the 2021 fiscal year. GMV is the total value of merchandise sold.

The payments platforms gets a major portion of its revenue from transaction fees that it collects from merchants for payment services. Paytm had reported negative cash flows from operations in each of the past three years due to operating losses and additional working capital requirements.

Payments Ecosystem

Paytm started off as a bill payments and mobile recharge platform in 2010 and gradually evolved into a comprehensive payments ecosystem that now includes payments, insurance, wealth management and e-commerce operations, among others.

Ahead of the offer, Paytm raised 82.35 billion rupees from 74 anchor investors including BlackRock and the Canada Pension Plan Investment Board last week.

Indian companies have raised a record $9.7 billion through IPOs in 2021 so far, figures from market monitor Prime Database showed.

Food delivery giant Zomato was the country’s biggest IPO of the year until now with its $1.3 billion share issue in July.

This year, India has also seen a record number of unicorns created – start-ups with a valuation of $1 billion or more – benefiting from investors spooked by a crackdown on technology giants in China.