Paytm under scrutiny after first-day flop followed record IPO
Over the weekend, Paytm released financial details for the month of October, which includes the critical period ahead of the Diwali holiday. Gross merchandise value rose 131% to 832 billion rupees ($11.2 billion) for the month, the company said. Loan disbursals, which analysts see as key to Paytm turning profitable, increased more than 400% to 6.27 billion rupees.
Shares of India’s pioneering digital payments startup Paytm | Avaneesh Parasar
NSE -11.86 % will be closely watched by traders after the stock plunged 27% in its debut Thursday following a record initial public offering.
Paytm’s parent company, One 97 Communications Ltd., raised $2.5 billion in its IPO, the most-ever for India, but its disastrous trading debut sparked criticism the company and its investment bankers had pushed too hard in the offering. Founder and Chief Executive Officer Vijay Shekhar Sharma had persistently made clear that he wanted Paytm to surpass the long-standing IPO record set by Coal India Ltd. in 2010. Indian markets were shut Friday for a holiday.
Over the weekend, Paytm released financial details for the month of October, which includes the critical period ahead of the Diwali holiday. Gross merchandise value rose 131% to 832 billion rupees ($11.2 billion) for the month, the company said. Loan disbursals, which analysts see as key to Paytm turning profitable, increased more than 400% to 6.27 billion rupees.
“The stock price may not go down significantly since 87% of issue was subscribed by institutional investors, who can always support the price,” said Deven Choksey, a strategist at KRChoksey Investment Managers Pvt.
India’s largest digital-payments provider lost more than a quarter of its value in its first day of trading, marking one of the worst-ever debuts by a major technology company and casting a chill over a stock-market boom that had ranked among the world’s most frenzied. The IPO had been touted by some as a symbol of the country’s growing appeal as a destination for global capital, particularly for investors looking for alternatives to China.
