Paytm debuts on NSE, BSE: Find all key details here
Today, the financial sector is clamoring about India's biggest initial public offering (IPO). Mobile payment platform Paytm's parent firm, One97 Communications, will debut on Dalal Street. The company is planning to raise Rs. 18,300 crore from the offer. Shares were listed on the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE) at 10 am. Here are more details.
Why does it matter?
One97 Communications was incorporated in the year 2000 and has since emerged as India's leading digital ecosystem for customers and merchants. Subscriptions opened from November 1 for three days and the price band of the issue was fixed at Rs. 2,080 to Rs. 2,150 per share. This is significant for the market because it is the largest-ever IPO in the country.
Despite slow response, demand for Paytm's subscription exceeded supply
Although the initial response was sluggish during the subscription period, the company received bids for 9.14 crore shares against the 4.83 crores that were offered for sale. Institutional buyers oversubscribed 2.79 times what was allocated for them and retail buyers oversubscribed 1.66 times what was reserved for them. Non-institutional buyers booked 24% of the shares set aside for them.
Paytm has seen exponential growth in just 10 years
Paytm is the brainchild of engineer Vijay Shekhar Sharma. Paytm was founded in 2010 as a mobile recharge platform but took off after Uber listed it as a quick payment option and the 2016 demonetization promoted digital payments. Sharma is now worth $2.4 billion.
Industry analysts say response doesn't match other recent IPOs
Although shares were oversubscribed, News18 reported that market analysts called this a lukewarm response compared to other recent IPOs in the country, including Zomato, Policybazaar, and Nykaa. Nykaa was oversubscribed by over 80x and qualified institutional buyers (QIBs) oversubscribed their share by 91x. The Policybazaar IPO was also oversubscribed by 16.5 times owing to a strong response from QIBs.
Investors temper expectations amid Paytm's grey market share price decline
Continuing on these lines, analysts reportedly speculated that Paytm will witness a flat or marginal listing today with a small premium of just 20% over the issue price per share. Concerns aren't unfounded because Paytm's price has been dropping on the grey market since its listing. On Wednesday, shares were up by only 1.4% over the issue price.
