PAYTM one of the largest IPOs in recent times in the Indian stock market, to raise Rs 18,300 crores made its debut on 18th November 2021 after receiving 1.9 times subscription for its shares offered. However, the IPO lacked its luster on its debut, as it listed at Rs 1929, below its allotment price of Rs 2150. Fall in price continued for 3days and touched the low of Rs 1271 on 18th November 2021, the second day of listing eroding over Rs 52,000 crore of its market capitalization in two days.
The company got its biggest push during the time of demonetization and it became a household name for digital payment transfer. As per the data, as of 31st, March 2021 the company has a 333 million+ client base and 21 million+ registered merchants to whom it offers payment services, financial services, and commerce and cloud services.
However many rating agencies and investment banks talked about the shares of PAYTM being overvalued and also about the uncertainty of its business model. Macquarie imitated coverage on One97 communication as “underperform” due to its business model, which lacks focus and direction. Since the inception of the firm, the firm couldn’t earn any profit. The operating revenue of the firm also continued to move southward in the last three years. In 2019, the operating revenue of the firm was reported at Rs 35797 million, which further came down to Rs35407 million and then to Rs 31868 million in 2021. Cumulative annual growth was recorded at -3.8%. The only positive thing about the financial statement of PAYTM was decreasing the quantum of losses from year to year. Net loss in FY2021 was reported at Rs 17,010 million against Rs 29,424 million loss reported in FY2020.
After touching its low of Rs 1271, share prices managed to come up, and on bargain buying and touched the level of Rs 1873, and it is currently near Rs 1782. But prices are still down by 16.79% from its allotment price of Rs 2150. Despite being one of the most used services of the country, the firm failed to make a blockbuster listing on the exchange. However, the advantage of the fall in share prices was taken by some anchor investors like BlackRock Inc. and Canada Pension Plan Investment Board, who bought more shares after share prices fell, post debut. Further fundamentals of the company will decide the future of the PAYTM shares. Currently, prices are expected to trade between Rs1600-1800, surpassing the allotment price is not any time near. The market will keep its eye on the 27th November meeting of PAYTM heads, when the firm is expected to release its financial earnings for the July-September ‘2021.