Making Sense Of Paytm’s Debacle Debut: NDTV

(Aunindyo Chakravarty is a senior journalist and senior economic analyst. The column first appeared in NDTV on November 18, 2021)

  • India’s biggest-ever IPO has fallen flat on its face on Day 1. Paytm sold shares at ₹ 2,150, listed at ₹ 1,950 and closed at its day low of ₹ 1,560. That means anyone who was hoping to cash in on listing day is down more than 27% on their investments. This has come in the middle of India’s IPO fever and after Zomato gave 66% returns on debut and Nykaa almost doubled at the end of its first day. Paytm’s IPO valued the company at roughly $20 billion, it closed on listing day at a valuation of about $14 billion. That is lower than what it was worth in 2019, when it raised one billion dollars. And if the brokerage firm Macquarie has got it right, then the Paytm stock is overvalued even now. Macquarie says Paytm is not worth more than ₹ 1,200 because it does nothing that other big players don’t already do, and that the company’s core business of wallets has become redundant with the spread of UPI. Macquarie calls Paytm a “cash guzzler” which has, in funding losses, burnt 70% of the money it has raised since its launch…

 

Share with