Nykaa's shares rocketed 96% from the offer price on their market debut on Wednesday. "We hope to continue to strive and drive financial inclusion for the underserved and unserved population of the country," a Paytm spokesperson said, adding the company was overwhelmed by the response to its IPO.īy comparison, food delivery start-up Zomato's (ZOMT.NS) IPO was more than 38 times oversubscribed earlier this year and its shares are up around 79% from the offer price, while e-commerce beauty platform FSN E-Commerce Ventures (Nykaa) (FSNE.NS) saw demand for 82 times the number of shares on offer. Paytm's IPO will be the largest Asia Pacific fintech IPO ever and is also the second largest fintech IPO of 2021 globally, said Elevation Capital, which will own 15% of shares in Paytm after the IPO. SoftBank's (9984.T) Vision Fund is cutting its stake by 2.5 percentage points to 16% with a 16.89 billion rupee share sale. Ant Group (688688.SS), which had a 28% holding in Paytm, is selling shares worth 47.04 billion rupees and will be left with a 23% stake. Marquee investors trimmed their stakes in the IPO. At this price Paytm is highly overvalued for a company that's not going to turn a profit any time soon," said Pratik Chandra, a 30-year old chartered accountant from Jamnagar, Gujarat. "I'd have liked to invest in Paytm if the price was a little lower.
Paytm increased the size of its offering last month and priced it at 2,080-2,150 rupees per share, targeting a $20 billion valuation which some retail investors saw as expensive. Other analysts, however, said a subscription level of 1.89 times was on a par with other major global issues and showed Indian investors had confidence in digital businesses. When you combine that with the valuation, it just doesn't sit right," said a fund manager with an investment firm that has stakes in several Indian startups, but decided against investing in Paytm. "In every Paytm business there is already an incumbent player and there is no clear path to profitability.
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Loss-making Paytm, formally called One97 Communications, offers a range of services from banking, shopping, movie and travel ticketing to gaming. Some analysts said the company, centered around payments but marketed as an all-in-one app, may have struggled to sell its complex model to investors as well as its path to profitability.
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