India's biggest-ever IPO Paytm slumps on market debut

Indian mobile payments elephantine Paytm mislaid a 4th of its worth connected its marketplace debut Thursday, aft raising $2.5 cardinal successful the country's biggest-ever IPO, arsenic traders questioned whether the loss-making steadfast would ever crook a profit.

Asia's third-largest system has been successful a grip of an archetypal nationalist offering frenzy, with start-ups attracting billions of dollars successful concern successful a agleam spot successful the Covid-battered economy.

But portion Paytm has established a starring presumption successful the fast-growing marketplace for mobile payments it has mislaid wealth successful each of the past 3 years and its marketplace debut showed the limits of capitalist appetite.

Founder Vijay Shekhar Sharma, erstwhile named arsenic India's youngest billionaire, wiped distant tears from his eyes erstwhile the nationalist anthem was played astatine the opening ceremonial earlier trading began connected the Bombay Stock Exchange.

Referring to the operation "Bharat bhagya vidhata"—"the 1 who volition specify the luck of this country"—he said Paytm has "actually done that".

But the company's shares tanked much than 25 percent from their IPO terms of 2,150 rupees wrong minutes of the open, earlier recovering slightly.

"There is simply a batch of euphoria for the integer abstraction and that seems to present beryllium subsiding," said SMC Global Securities expert Saurabh Jain.

"These companies are coming retired with IPOs astatine scorching valuations and it's anybody's conjecture what valuations are correct," helium told AFP.

"It is precise hard for a institution similar Paytm to crook profitable. They person the scalability but they are not capable to marque wealth done their concern model."

Following the debut, Paytm's marketplace capitalisation fell from an IPO valuation of $20 cardinal to nether $14 cardinal erstwhile shares dropped arsenic debased arsenic 1,586 rupees.

Rakesh Mehta, a 49-year-old Kolkata-based atom exporter, said helium had bought 12 shares worthy 25,800 rupees successful Paytm, encouraged by Sharma's bullishness astir his firm.

"I was shocked to spot the terms erstwhile it opened. I didn't get overmuch of a accidental to sell," Mehta told AFP.

"I was readying to merchantability 50 percent for listing gains and clasp the rest. Now I person nary prime but to clasp on. If it goes anyplace adjacent to my acquisition price, I volition decidedly sell. I wouldn't privation to hazard holding it further."

Rock music

Sharma—a schoolteacher's lad who says helium learned English by listening to stone music—retains a 14 percent involvement successful the business, worthy $2.4 cardinal astatine the IPO terms but astir $420 cardinal little by lunchtime.

Other shareholders see Chinese tycoon Jack Ma's Alibaba radical and subordinate Ant Financial, on with Japan's SoftBank and Warren Buffett's Berkshire Hathaway.

Ant Financial sold 3.5 percent of its 28 percent involvement successful the IPO to conscionable regulatory requirements that nary shareholder should ain much than 25 percent of a listed company. Alibaba continues to ain different six percent.

Paytm's level was launched successful 2010 and rapidly became synonymous with integer payments successful a state traditionally dominated by currency transactions.

It has benefited from the government's efforts to curb the usage of cash—including the demonetisation of astir each banknotes successful circulation 5 years ago—and astir recently, from the pandemic.

Nearly 22 cardinal Indian store owners, taxi and rickshaw drivers and different vendors judge payments arsenic debased arsenic 10 rupees ($0.13) utilizing Paytm's ubiquitous blue-and-white QR codification stickers.

The level had 337 cardinal customers astatine the extremity of June, according to the company's regulatory filing. In 2020-21 it handled transactions worthy much than $54 billion.

Apart from Paytm, Indian companies person raised a grounds $10.5 cardinal done IPOs successful 2021 truthful far, including quality retailer Nykaa, which doubled connected its debut past week.

---

---

© 2021 AFP