Initial public offering (IPO) to raise the most money ever in India now finds itself in India’s biggest Flop listing. Founder and CEO Vijay Shekhar Sharma, Owner of mobile payments company Paytm, went public last week, selling stock worth $2.46 billion (INR 18,300 crores) in exchange for his shares. Earlier this month, One97 Communications, Paytm’s parent company, was the largest IPO to be launched on the Bombay Stock Exchange. Their IPO had a value of ₹18,300 crores.
The IPO of the digital payments firm was launched at the BSE Convention Hall with a traditional launching event, but investors questioned the business model. The ritual of Gong ringing took place exactly at 10:00 pm, marking the formal launch of the IPO. Vijay Shekhar Sharma, MD & CEO of BSE, Ashish Chauhan, and others attended the event. Vijay Sharma founded Paytm as a mobile recharge platform in 2010. In late 2016, as demonetization boosted the use of digital payments, Paytm’s use increased further. Forbes says that Sharma became a billionaire as a result of Paytm’s success.
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Within minutes of the launch of Paytm’s IPO, its shares were trading in the red zone and falling over 20% amid market sentiment. Shares were changing hands at 1,645 in morning trade, compared to the offer price of 2,150. One 97 Communications Ltd, the company that owns Paytm, raised a record IPO sum, but its disastrous trading debut has prompted criticism of the company. Investors who bought into Paytm’s IPO this month suffered losses of about 900 million dollars as shares of its owner tumbled for a second day.
In an interview with ANI, Madhur Deora, the Chief Financial Officer (CFO) of Paytm revealed that the company’s IPO is not just the largest ever on BSE, but is also the largest fintech IPO in Asia and the fourth largest in the world. Someone here told me about it; we are happy to know, he said.
Upon being asked about the slumped start to the largest IPO, Deora replied, “We aren’t looking at the prices of the shares, at least not today when the IPO just launched. Throughout this process, we have been supported by our investors, and we appreciate their support”. Meanwhile, Ashish Chauhan, CEO of the BSE, clarified that they were happy India is rebounding faster from the COVID-19 pandemic.
“Demonetisation and the pandemic gave a big boost to the Fintech sector. BSE launched the largest IPO in its history today, which is not only the largest IPO of the exchange but also the largest fintech IPO of Asia and the fourth largest fintech IPO in the world,” Chauhan said.
