Paytm Shares Slump 13% As Lock-In For Anchor Investors Ends
Paytm’s stock fell as much 13.37%, the steepest since Nov. 22.
Shares of One97 Communications Ltd., the parent of digital payments platform Paytm, slumped the most since its second trading session after the regulatory lock-in on shares allotted to anchor investors in the initial public offering ended.
Paytm’s stock fell as much as 13.37% intraday, the steepest since Nov. 22, but pared some of the losses to close 7.63% lower at Rs 1,381.90. That compares with 0.60% decline in benchmark Nifty 50.
The company’s stock had tanked 27% on its first day of trading, marking one of the worst-ever debuts by a major technology company, as analysts raised concerns about its profitability and investors balked at high valuation. It had tumbled another 13% in the second session.
The payments platform had raised Rs 8,235 crore from 122 anchor investors ahead of its Rs 18,300-crore IPO—the nation’s largest. It had allotted 3.83 crore shares at Rs 2,150 apiece to top sovereign wealth funds and financial investors such as Singapore's GIC, Canada’s CPPIB, BlackRock, Alkeon Capital and Abu Dhabi Investment Authority.
Anchor investors are large institutions roped in to generate demand ahead of an IPO. The shares allotted to these investors are locked in for a month from the listing day. When the regulatory leash loosens, the stock usually faces volatility.
In December, lock-in period for nine newly listed stocks ends, including Sapphire Foods India Ltd.—the largest Indian franchisee of Yum Brands Inc. that owns KFC and Pizza Hut—and Fino Payments Bank Ltd.