On Thursday Paytm was officially listed on BSE and NSE and as was expected the listing of Paytm happened at a discounted rate. On NSE, Paytm Shares opened for trading at Rs 1950, marking a decline of nearly 9% or Rs 200 from its issue price of Rs 2150. The shares continued to plunge during the intra-day trading, plunging as much as 26% to trade nearly at Rs 1,586. Paytm’s listing brings closure to India’s biggest-ever IPO. The IPO was worth Rs 18,300 crore.
The tepid response to Paytm’s debut listing was sort of expected considering that Paytm’s stock price was continuously nosediving in the grey market. Even the overall response of the investors to high-profile IPO was very tepid. Paytm’s IPO had to wait for the last day to get it over-scribed. To put it in more mild words, Paytm’s IPO almost sailed through its IPO.
Many of Paytm’s big investors like Alibaba and Softbank have made an exit through the IPO.
Experts cited several factors like enormous issue size of Paytm, over-expensive valuation, challenging path to profitability and company’s recurring losses for lackluster response to Paytm’s IPO. The tepid debut of Paytm stands in a very stark contrast to the stellar debut of Naykaa on the bourses.
Paytm’s core business of digital payment, where it is present in both ends of the vertical (B2C & B2B) sees huge competition from other well-funded players including Google Pay and Phonepe. The company over the years has branched into other verticals like stock broking, insurance and wealth management. However, company is not a market leader in any of these verticals and will have to put painstaking efforts to rise to the podium.
Paytm also has another vertical in the form of e-commerce, which today makes negligible contribution to Paytm’s topline. Despite heavy investment, Paytm Mall failed to surmount any real challenge to incumbent leaders Amazon India and Walmart owned Flipkart. Today Paytm Mall sits on the fringe of India’s burgeoning e-commerce industry.