Shares of One 97 Communications, the parent company of digital payments company Paytm, debuted on the stock market on Thursday. The stock was opened for trading at Rs 1,950 on the NSE, marking a drop of 9.3% or Rs 200 from its issue price of Rs 2,150. Paytm shares extended losses after l opening, with the stock falling 21% from the issue price, reaching an intraday low of Rs 1,705.
Paytm’s 18,300 crore IPO, which was the largest in the country, was underwritten 1.89 times last week. On BSE, the Paytm share was opened for trading at Rs 1,955.
Despite the decline in Paytm shares in its early days, the company recorded a valuation of over Rs 1 lakh crore.
Analysts said Paytm’s expensive valuations were the reason for the stock price plummeting in its first trading session.
The IPO of Paytm consisted of a new issue of Rs 8,300 crore and an offer to sell (OFS) by existing shareholders valued at Rs 10,000 crore. Paytm awarded shares worth Rs 8,235 crore to more than 100 institutional investors, including the Singapore government, ahead of the country’s largest stock exchange listing.
Paytm has attracted the interest of 122 institutional investors who bought more than 3.83 crore of shares for Rs 2,150 a piece, according to a regulatory document dated November 3.
Engineering graduate Vijay Shekhar Sharma founded Paytm in 2010 as a mobile top-up platform. The company grew rapidly after ride-sharing company Uber listed it as a fast-payment option in India and its use increased further in late 2016 after the shock ban on high-value banknotes boosted digital payments.
Paytm’s success made Mr. Sharma, the son of a schoolteacher, a billionaire with a net worth of $ 2.4 billion according to TSWT. Its IPO also struck hundreds of new millionaires in a country where per capita income is less than $ 2,000.