Shares of One97 Communications Ltd, Paytm's parent company, on Thursday plummeted 21 per cent in their market debut, valuing the Ant Group-backed digital payments firm at around Rs 1.11 trillion after it completed India's biggest-ever IPO.
The stock opened at Rs 1,950 on the National Stock Exchange and the listing price on the Bombay Stock Exchange was Rs 1,955, against the issue price of Rs 2,150. At around 10.25 am, the stock was trading at Rs 1701, down over 20 per cent.
The digital fintech firm’s shares extended losses as the stock further fell as much as 26 per cent, from issue price, to hit an intraday low of Rs 1,586, as per NDTV.
"Paytm, the biggest IPO in India so far debuted the secondary market on a weaker note as compared to our expectations of a flat listing," Santosh Meena, Head of Research, Swastika Investmart Ltd, said.
The company commanded a market valuation of Rs 1,26,737.50 crore in early trade on the BSE.
Ant Group-backed Paytm's Rs 18,300 crore IPO was oversubscribed 1.89 times on the last day of India's biggest share sale last week. This was greater than miner Coal India's Rs 15,000 crore offer a decade back.
The initial public offering of Paytm's parent company One97 Communications Ltd received bids for 9.14 crore equity shares against the offer size of 4.83 crore shares, according to information available with stock exchanges on November 10.
Paytm had fixed its IPO in a price band of Rs 2,080-2,150 per share.
In the meantime, the global brokerage firm Macquarie has given Paytm an underperform rating with a target of Rs 1,200, suggesting 44 per cent potential downside from the issue price of Rs 2,150. Paytm's business model lacks focus and direction, it said while calling the company a 'cash guzzler'.
Macquarie said achieving scale with profitability is a big challenge and that regulations and competition are added worries.
Incorporated in 2000, One97 Communications is India's leading digital ecosystem for consumers and merchants. It offers a range of services, including payment services and financial services.
(With PTI Inputs)