Paytm shares listed on bourses with a loss of 9.05%. The stock opened at Rs 1,950 on the National Stock Exchange (NSE) at 10 am and at Rs 1,955 on the Bombay Stock Exchange (BSE) compared to its issue price of Rs 2,150.
Paytm shares extended losses after opening as the stock fell as much as 23 per cent, from issue price, to hit an intraday low of Rs 1,655.
Paytm founder Vijay Shekhar Sharma, 43, got emotional and choked up while delivering his speech at the listing ceremony.
In his speech, he said, “Jab bhi kabhi Rashtra Gaan aata hai, aur ek line aati hai Bharat Bhagya Vidhata, toh meri aankon mein se aansu aatey hai, Abhi mere sath wo hi ho gaya, kyunki aapney Rasthra Gyan chala diya (Whenever the national anthem is played, I get teary-eyed when I hear the words “Bharat Bhagya Vidhata”, this happened to me today as you played the national anthem),” he said.
“People always tell me how do I raise money as such high prices, and I tell them I never raise money on price, I raise money on purpose,” he added
Despite the dip in Paytm shares on debut the company clocked the valuation of over Rs 1 lakh crore. Analysts pointed at Paytm’s expensive valuations as the reason behind the fall in stock price on its first trading session.
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”.
For the unversed, Paytm’s Rs 18,300 crore IPO, which was the country’s largest, was subscribed 1.89 times last week.
Paytm allocated shares worth Rs 8,235 crore to more than 100 institutional investors, including the government of Singapore, ahead of the country’s largest stock market listing.
The IPO garnered interest from 122 institutional investors who bought more than 3.83 crore shares for Rs 2,150 apiece, according to a regulatory document dated November 3.
It is worth adding that Engineering graduate Vijay Shekhar Sharma founded Paytm in 2010 as a platform for mobile recharges.
However, the company grew quickly after ride-hailing firm Uber listed it as a quick payment option in India and its use further increased rapidly after the Prime Minister announced demonetisation in November 2016 and digital payments got a boost.
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.