Paytm IPO Listing Today: All eyes are set on the listing of India’s biggest initial public offering (IPO) on Thursday, November 18. Digital payments platform Paytm’s parent company One97 Communications, which floated its maiden public offer days back, is going to make its debut at the Dalal Street amid tepid response from buyers. The Paytm IPO is the biggest of its kind in India, planning to raise Rs 18,300 crore from the offer. Paytm shares will be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE) at 10 am on the day. Incorporated in 2000, One97 Communications is India’s leading digital ecosystem for consumers and merchants.
The Paytm IPO opened for subscription from November 1 to 3. The payments platform fixed the price band of the issue at Rs 2,080 – 2,150 per share. The offer was a combination of fresh issue of Rs 8,300 crore and an offer for sale of Rs 10,000 crore by selling shareholders including founder and investors.
One97 communications, the parent company of Paytm, received bids for 9.14 crore shares against 4.83 crore shares offered for sale. Qualified institutional buyers subscribed 2.79 times the portion reserved for them, while retail buyers bid 1.66 times the part set aside for them. Non-institutional buyers booked 24 per cent of the shares kept aside for them.
Paytm raised raised Rs 8,235 crore from 122 anchor investors by allocating 3.83 crore shares at Rs 2,150 a share. BlackRock Global Funds — through World Technology Fund (40.38 lakh shares) and World Financial Fund (6.376 lakh shares) – have garnered 12.2 per cent of the total anchor portion. CPPIB has been allotted about 43.62 lakh shares (11.4 per cent).
Even though the offer was oversubscribed, analysts called this a tepid response as compared to the other IPOs like Nykaa and Policybazaar which got listed or issued recently. The Nykaa IPO was oversubscribed by more than 80 times and QIBs subscribed to their portion by 91 times. The Policybazaar IPO was subscribed 16.5 times, largely amid strong response from QIBs.
Not only this, Paytm’s share price at the grey market was consistently falling ever since it got listed. On Wednesday, Paytm shares were fetching a premium of Rs 30 at the grey market, up by only 1.4 per cent over the final issue price of Rs 2,150. The company’s stocks were trading at Rs 2,300 on October 7 at the grey market, which is a Rs 150 or 7 per cent premium over the final issue price, but fell to Rs 80 on the opening date of the IPO. On the closing day of the issue, the Paytm IPO GMP fell to as low as Rs 40.
Analysts predict a flat or marginal listing for Paytm, with a premium of around 20 per cent over the final issue price.
“The IPO of Paytm got a tepid response from investors compared to other startup IPOs like Nykaa, Zomato, etc. Expensive valuations and continuous losses made investors wary. Road to profitability too looks challenging. The after-effect of tepid subscription may be seen on listing. I am expecting a flat to very marginal listing in Paytm,” said Abhay Doshi, founder of pre-IPO and unlisted shares platform UnlistedArena.com.
“We expect Paytm may get listed at a premium of around 20% from it’s listing price or in the range of 2100 – 2170. However, after looking the overall valuations and losses of Paytm, we advice investors to book profit on the listing day and wait for a good correction of around 20% to re-enter. The company’s future growth is a key to watch for long term investors,” said Ravi Singh, vice president and head of research at Share India.
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