One 97 Communications, the parent company of Paytm, was up over 9 per cent at Rs 1,632 on NSE. In the last two sessions, it has climbed about 19 per cent. However, this comes after a massive crash on the first two days of listing.
Paytm, at Rs 18,300 crore, was the biggest primary issue ever in India. However, many analysts said the issue was priced at an expensive end, not leaving much value for the investors. However, that did not deter the IPO applicants from oversubscribing the issue.
“The Paytm listing fiasco has impacted the image of FPIs as representing smart money. The FPI anchor investors who invested Rs 7,150 crore in Paytm are sitting on huge losses. The message from this fiasco to the retail investors is that valuation of the new-age digital companies is extremely complex with high risk. Therefore, retail investors should be very cautious in investing in this segment,” said VK Vijayakumar, Chief investment Strategist at Geojit Financial Services.
Analysts have been bearish on the counter after the listing. Macquarie termed it as “cash guzzler” and said the shares were worth just Rs 1,200. The broker said Paytm has too many fingers in too many pies, resulting in no leadership position in any segment.
Other analysts have also expressed similar views. Its absence of profitability plans has also come out to hunt the stocks. The company in its IPO prospectus said a profit might be elusive in the foreseeable future.
