The initial stake sale of One97 Communications, India’s largest-ever, was open for subscription between November 8-10. The company sold its shares in the range of Rs 2,080-2,150.
Foreign brokerage Macquarie has initiated coverage of
with an underperform rating. It has a target of Rs 1,200 on the stock, compared with the issue price of Rs 2,150, suggesting 44 per cent potential downside.
Vikas Jain, Senior Research Analyst at Reliance Securities, said investors with a longer term view can continue to hold the stock, whereas short-term investors may exit the stock.
“The tepid subscription figures dented morale and the listing too has been on the weaker side, which may lead to some more correction in the stock,” he added. “One should wait for more clarity to make fresh buys.”
Astha Jain, Research Analyst, Hem Securities, said the issue was purely for investors with a high-risk appetite. “Investors should continue to hold the stock for a longer term and avoid any fresh buys,” she added.
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.
Santosh Meena, Head of Research, Swastika Investmart, suggested only aggressive investors should hold this stock for the long-term amid uncertainty.
“Those who played for listing gain should keep a stop loss below Rs 1,720, which is 20 per cent lower than the issue price,” he added.
Akhil Rathi, Vice President – Advisory at Marwadi Shares and Finance, blamed the weak listing to expensive valuations and the fact that the company has been making losses over the past few years.
“The company will face tough competition which will impact its market share. Long-term investors should avoid the stock and wait for better prices,” he added.
With its debut on Dalal Street, Paytm has joined the likes of Nykaa, Zomato and PB Fintech. All other listed home-grown startups have rewarded investors handsomely. Paytm is the only new-age player to deliver negative returns.
Ajit Mishra, VP Research, Religare Broking, said the company was posting weak financials, which likely jittered the sentiments. “Investors should be very choosy while investing in new-age startups,” he added.
