PAYTM erodes 75% of its value from the issue price of Rs 2150

PAYTM one of the largest digital payment platforms in the country and believed to be the most valuable startup is having a hard time retaining its worth post its debut on the Indian stock market.

After a lot of hustle over the Paytm IPO, as it was one of the biggest IPO in recent times, where it rose a whopping amount of RS18,300 crores, which consisted of a fresh issue of Rs8,300 crores and Rs10,000 crores under offer for sale.

Paytm erodes 75% of its issue price
  • The fintech firm made its debut on the stock market on 18th November 2021

The IPO was subscribed for 1.9 times. However, it fell drastically on the first day of its show in NSE. The Paytm share got listed at Rs 1929, down by 10.27% from its allotment price of Rs2150.  Worse was yet to come, on the same day, Paytm hit the low of Rs 1560, and market capitalization came down to Rs 70,418

  • Macquarie India gave Paytm a rating of “underperform”

Paytm seems to be coming only under the cloudy sky as their share prices were already struggling to regain their position, where the brokerage firm Macquarie gave Paytm a “underperform” rating and reduced the target price from 1200 to 900, citing the weak business model of Paytm, as a major reason for downgrading.

  • The third and seems fatal blow- Curbs imposed by apex bank RBI on Paytm

Once claiming the valuation of Rs1.03 lakh crore couldn’t even sustain half of it and has come down to Rs35,000 crores. Paytm is currently trading at Rs544, down by 74.69% from the issue price of Rs2150. This crash in stock came when RBI has restricted Paytm bank to onboard new clients, which also made the chances of getting a banking license, weak.  Further putting pressure on the prices is a fresh target price issue by the brokerage firm Macquarie India to Rs450, just a week ago.

Investors must stay cautious before investing in Paytm, as the share is in a free-fall situation and might go below Rs450 until there is some positive aspect in the business happens.

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