Diabytes
Paytm upsets investors on its stock market debut, shares plunge 21% in first day of trade
Shares were changing hands at 1,705 rupees in early morning trade versus the offer price of 2,150 rupees.
- Paytm shares plummeted 21%.
- Paytm market debut today.
- Paytm raised $2.5 billion in its IPO.
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 "Paytm upsets investors on its stock market debut, shares plunge 21% in first day of trade")
Mumbai: Shares in Paytm plummeted 21% in their market debut, valuing the Ant Group-backed digital payments firm at around 1.11 trillion rupees ($14.9 billion) after it completed India`s biggest-ever IPO.
Shares were changing hands at 1,705 rupees in early morning trade versus the offer price of 2,150 rupees.
Paytm, which also counts SoftBank among its backers, raised $2.5 billion in its initial public offering, of which $1.1 billion was from institutional investors. Last week it received $2.64 billion worth of bids for the remaining shares on offer, or 1.89 times.
Analysts at Macquarie Research said in a note to clients that Paytm`s business model lacked "focus and direction" and initiated coverage with an underperform rating. "Achieving scale with profitability a big challenge," the note said, calling the company a "cash guzzler".
The company, headquartered on the outskirts of India`s capital New Delhi, priced its 85.1 million-share issue at the top of the range at 2,150 rupees each.
Engineering graduate Vijay Shekhar Sharma founded Paytm in 2010 as a platform for mobile recharges. The company grew quickly after ride-hailing firm Uber listed it as a quick payment option in India and its use swelled further in late 2016 when New Delhi`s shock ban on high-value currency notes boosted digital payments.
Paytm`s success has turned Sharma, a school teacher`s son, into a billionaire with a net worth of $2.4 billion according to Forbes. Its IPO has also minted hundreds of new millionaires in a country where per capita income is below $2,000.
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