Paytm shares plummeted for a second day on Monday, shaving off $7.75 billion from its market value after its $2.5 billion initial public offering, marking one of the worst debuts ever by a major technology company.
Paytm shares fell 17.78 per cent as of 1:03pm to ₹1,271 compared with the offer price of ₹2,150 after falling more than 27 per cent on the listing day on November 18. The fall has cut its market value to about $12 billion hitting individual investors and global institutions such as BlackRock Inc and the Canada Pension Plan Investment Board that had scooped up shares.
Paytm’s parent company, One 97 Communications Ltd, raised a record IPO sum for India, but its disastrous trading debut sparked criticism against the company.
“IPOs have been running hot in India, so a correction in broader markets will hurt these stocks the most,” Deepak Shenoy, founder and chief executive of Capitalmind, told Reuters.
Shenoy said that people will be reluctant to come in when conditions are not favourable, raising doubts about whether the rush for new listings was slowly fading.
“Investors should wait a bit for the stock to settle down. There is too much volatility and pessimism in the stock,” Mohit Nigam, a fund manager with Hem Securities Ltd, told Bloomberg.
Paytm released financial details for the month of October, which includes the critical period ahead of the Diwali holiday, over the weekend. Gross merchandise value rose 131% to ₹832 billion for the month and loan disbursals increased more than 400 per cent to ₹6.27 billion, the company said.
Paytm stumble may chill India’s stock-market boom, which had ranked among the world’s most frenzied.
Sharma has defended the company’s prospects and rallied Paytm employees during a four-hour town hall and encouraged them to look past the first-day drop, according to employees who participated.
(With agency )
