Paytm Ends 27% Lower On Market Debut
Paytm stock ended more than 27% lower on its first trading day.
One97 Communications Ltd., the parent of digital payments platform Paytm, recorded the worst trading debut among large companies as analysts raised concerns about its profitability and investors balked at high valuation.
The stock ended more than 27% lower on its first trading day. That, according to Bloomberg data, beat Reliance Power Ltd.’s 17.3% drop on its listing day in 2008.
Paytm's scrip listed at Rs 1,955 apiece, a 9% discount to its IPO price of Rs 2,150. It then fell to an intraday low of Rs 1,602.7, down over 25%, and closed at Rs 1,560.8. The company’s market cap stood at Rs 1.01 lakh crore at the end of first trading session.
The IPO had witnessed 1.89 times more demand than the shares on offer, with the portion reserved for non-institutional investors remaining undersubscribed by the end of the final day. The IPO had got off to a slow start, with about 48% of the issue being bought through the second day and 18% on the first.
The public float, having a price band of Rs 2,085-2,150 apiece, comprised a fresh issue worth Rs 8,300 crore and a sale by existing shareholders worth Rs 10,000 crore.
Macquarie initiated coverage on Paytm with an 'underperform' rating and a price target of Rs 1,200 apiece, implying a potential downside of more than 40% than the IPO price.