India’s Paytm IPO crashes on debut, shedding $5bn from valuation
India’s largest initial public offering (IPO), Paytm, has crashed on its market debut – evaporating around $5bn from its valuation.
The debut was one of India’s worst, falling as much as 27 per cent, as doubts were raised around Paytm’s business model.
“One day does not decide what our future is,” CEO Vijay Shekhar Sharma said.
“It is new business model. It takes a lot for someone to understand it,” Sharma added in response to the market fall.
Sharma was still able to cash in on the float, selling off around 1.87m shares for around $54m.
The Ant Group and Softbank-backed digital payments firm tabled plans to raise up to $2.2bn in its IPO in July – after the pandemic stoked India’s digital economy and paved the way for a flurry of high ranking floats.
The firm, which competes with Google Pay and PhonePe, rallied $577m in new funds to widen its payments services offering earlier on in the year, using around $269m to enter into new initiatives and explore acquisition opportunities, it said.
Though Paytm’s losses have reportedly caught up with the firm, despite its leadership team anticipating losses for the foreseeable future.
Morgan Stanley, Goldman Sachs, Axis Capital, ICICI Securities, JPMorgan, Citi and HDFC Bank were bookrunnners on the IPO.