A day ahead of its listing, shares of Paytm on Wednesday exchanged hands at a discount of Rs 20-25 in the unofficial market, compared with its issue price band of Rs 2,080-2,150. The weakness in Paytm contradicts the trend seen among recent startups such as PB Fintech and FSN E-commerce Ventures that have made fantastic Dalal Street debuts.
Dealers tracking the grey market say the ultra-expensive pricing, poor financials and muted growth prospects are the key reasons for the poor listing.
Abhay Doshi, co-founder, UnlistedArena, says Paytm is likely to be a flop show on debut, disappointing investors after coming out with India’s largest IPO. “The valuations of the issue were on a highly expensive side. Also, the company has not shown any significant performance in the financials and it is losing market share, adding to the woes,” he adds.
The Rs 18,300-crore IPO of Paytm was open for subscription between November 8 and 10. It raised Rs 8,300 crore via issuance of fresh equity shares, and existing shareholders and promoters sold shares worth Rs 10,000 crore.
The IPO was subscribed less than two times. The quota for qualified institutions was subscribed 2.79 times, whereas retail investors’ portion was subscribed 1.66 times. Non-institutional investors’ quota was subscribed only 24 per cent. It is scheduled for listing on Thursday, November 18.
Ankur Saraswat, Research Analyst at Trustline Securities, says the company will make a flat listing. If investors who got the allotted shares could book listing gains. “New investors should wait for a meaningful correction in the shares and then enter this fintech behemoth,” he adds.
