Paytm share price falls 16% from IPO price, muted listing disappoints investors amid weak market sentiment

The public issue of Paytm was subscribed 1.89 times by investors earlier this month.

Paytm shares began trading on the stock exchanges at a discount to the IPO price amid muted market sentiment. The shares of the fintech giant opened for trading at Rs 1,955 per share, down Rs 195 or 9.07% from the issue price of Rs 2,150 per share. Minutes into the trade, Paytm extended losses, falling more than 16% from the IPO price to trade around Rs 1,790 per share. Paytm’s Rs 18,300 crore IPO is the largest IPO ever to hit Dalal Street. The issue witnessed a mixed response from investors as institutional buyers and retail investors oversubscribed their portion while NIIs failed to fully subscribe their portion.

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Analysts had advised investors to exit the stock on listing and wait for better entry opportunities. Largely concerns have been voiced around Paytm’s high valuations. With a market capitalization of Rs 1.26 lakh crore, Paytm is yet to turn profitable, which has been the talking point for analysts. The Ant-Group backed firm is expected to continue to report losses over the next few years.

Paytm started as a digital wallet platform, enabling customers to make utility payments and mobile recharge through the application has turned into a payment super-application that offers wealth management, e-commerce, insurance, credit and much more. “As per an RBI internal study, payments banks may be allowed to apply for small finance bank (SFB) licensing, which would enable Paytm to lend on its own balance sheet,” said domestic brokerage firm Motilal Oswal in a report. Payments and financial services contribute around 75% to the company’s total revenues.

The public issue of Paytm was subscribed 1.89 times by investors earlier this month. Qualified Institutional Buyers (QIB) had subscribed to the issue 2.79 times their portion while retail investor subscription was at 1.89 times. Non-Institutional investors (NII) had subscribed to their portion only 0.24 times.