Bad start for Paytm IPO as shares crash 26% on debut, disappoints investors

Digital payments company Paytm run by One97 Communications Ltd saw a sharp plunge in shares during its stock market debut on Thursday. This comes a week after the country's biggest-ever initial public offering. The shares plunged as much as 26% from the issue price on the first day itself.

The Paytm stock opened for trading at Rs 1,950 on the NSE, marking a decline of 9.3% or Rs 200 from its issue price of Rs 2,150. Paytm's Rs 18,300 crores IPO is the largest initial public offering ever to hit Dalal Street. More than 1.6 crore equity shares of Paytm moved between investors on the NSE.

Paytm IPO which is the biggest in the country's corporate history and the second-largest fintech IPO of 2021 globally, after Spain-based Allfunds, priced its shares in a price band of Rs 2,080 to Rs 2,150 per share, valuing the company at Rs 1.39 lakh crore at the upper end of the price band.

What led to Paytm's weak listing

Paytm's IPO was subscribed 1.89 times last week. On the BSE, Paytm stock opened for trading at Rs 1,955.

Paytm company clocked the valuation of over Rs 1 lakh crore despite a dip in its shares on the first day.

Analysts see Paytm's expensive valuations as the reason for the fall in stock prices in its debut trading session.

Paytm's IPO consisted of a fresh issue of Rs 8,300 crore and an offer for sale by existing shareholders worth Rs 10,000 crore.

Paytm garnered interest from 122 institutional investors who bought more than 3.83 crore shares for Rs 2,150 per share.