Paytm’s stock dropped 26% after India’s biggest-ever IPO

Paytm’s shares fell as much as 26% in a shaky stock market debut on Thursday, just one week after the country’s largest-ever IPO. On the NSE, the stock opened for trading at 1,950 rupees, down 9.3% or 200 rupees from its issue price of 2,150 rupees.

Paytm’s stock continued to fall after it opened, falling as much as 26% from its IPO price to an intraday low of 1,586.

The following are ten things to know regarding Paytm’s poor listing:

• Last week, Paytm’s 18,300 crore IPO, which was the country’s largest, was 1.89 times subscribed. Paytm’s stock started trading at 1,955 on the BSE.
• Despite a drop in Paytm’s stock on its initial public offering, the company was valued at over Rs 1 lakh crore.
• The dip in Paytm’s stock price on its first trading session was attributed to the company’s high valuations, according to analysts.
• Paytm’s business model lacks “focus and direction,” according to analysts at Macquarie Research, who commenced covering with an underperform rating. The company was described as a “cash guzzler” in the note, which stated that “achieving growth with profitability is a huge issue.”
• Paytm’s initial public offering (IPO) included an 8,300 crore fresh issuance and a 10,000 crore offer for sale (OFS) by existing shareholders.
• More than 100 institutional investors, including the Singapore government, received shares worth Rs 8,235 crore from Paytm ahead of the country’s largest stock market debut.
• According to a regulatory statement dated November 3, Paytm drew the interest of 122 institutional investors, who purchased more than 3.83 crore shares for $2150 each.
• Paytm was launched in 2010 by engineering graduate Vijay Shekhar Sharma as a platform for cellphone recharges. Following ride-hailing business Uber listed it as a speedy payment option in India, the company developed quickly, and its use grew even further in late 2016 after a shock ban on high-value currency notes boosted digital payments.
• According to Forbes, Paytm’s success has made Mr Sharma, a schoolteacher’s son, a billionaire with a net worth of $2.4 billion. In a country where the per capita income is less than $2,000, its IPO has created hundreds of new billionaires.
• Paytm shares were trading at 1,676 as of 10:46 a.m., down 22% from their issue price.