Paytm Listing Is Worst Market Debut Since 2000
One97 Communications Ltd., the parent of digital payments platform Paytm, recorded the worst trading debut in at least two decades 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 Prime Database, beat Reliance Power Ltd.’s 17.22% drop on its listing day in 2008.
That's also the worst market debut among firms with an IPO of at least Rs 1,000 crore since 2000, with One97 Communications falling more than Coffee Day Enterprises Ltd.
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 value stood at Rs 1.01 lakh crore at the end of its first trading session.
The Rs 18,300 crore IPO 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 an offer-for-sale by existing shareholders worth Rs 10,000 crore.
On Nov. 18, 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% to the IPO price.
After the listing, founder Vijay Shekhar Sharma told BloombergQuint he wasn't disappointed. "“We are not going to be driven by stock markets, because share prices are run by the opinions of buyers and sellers, which we have no influence on.”
Watch that interview here.