{"id":123110,"date":"2021-11-18T07:47:26","date_gmt":"2021-11-18T07:47:26","guid":{"rendered":"https:\/\/fin2me.com\/?p=123110"},"modified":"2021-11-18T07:47:26","modified_gmt":"2021-11-18T07:47:26","slug":"shares-in-indias-paytm-plunge-24-in-market-debut-investors-question-business-model","status":"publish","type":"post","link":"https:\/\/fin2me.com\/markets\/shares-in-indias-paytm-plunge-24-in-market-debut-investors-question-business-model\/","title":{"rendered":"Shares in India&#x27;s Paytm plunge 24% in market debut, investors question business model"},"content":{"rendered":"<ul>\n<li>Shares in India&#x27;s\u00a0Paytm\u00a0plummeted 24% in their maiden day of trade, with investors questioning the loss-making digital payments firm&#x27;s business model.<\/li>\n<li>Shares were changing hands at 1,645 rupees in morning trade versus the offer price of 2,150 rupees.<\/li>\n<li>Paytm, which also counts SoftBank among its backers, raised $2.5 billion in its initial public offering.<\/li>\n<\/ul>\n<p>Shares in India&#x27;s\u00a0Paytm\u00a0plummeted 24% in their maiden day of trade, with investors questioning the loss-making digital payments firm&#x27;s business model despite it having just completed the country&#x27;s largest-ever IPO.<\/p>\n<p>Shares were changing hands at 1,645 rupees in morning trade versus the offer price of 2,150 rupees, valuing the Ant Group-backed company at around 1.07 trillion rupees ($14.4 billion).<\/p>\n<p>If it were to fall as far as 1,560 rupees, it would hit the exchange&#x27;s 20% circuit breaker, at which point trading would be halted for the day.<\/p>\n<p>&quot;Paytm\u00a0has been loss-making and there is no sign to turn profitable in near future,&quot; said Parth Nyati, founder of Indian trading platform Tradingo.<\/p>\n<p>Paytm, which also counts SoftBank among its backers, raised $2.5 billion in its initial public offering, of which $1.1 billion was from institutional investors. Last week it received $2.64 billion worth of bids for the remaining shares on offer, or 1.89 times.<\/p>\n<p>Analysts at Macquarie Research said in a note to clients that\u00a0Paytm&#x27;s business model lacked &quot;focus and direction&quot; and initiated coverage with an underperform rating. &quot;Achieving scale with profitability a big challenge,&quot; the note said, calling the company a &quot;cash guzzler&quot;.<\/p>\n<p>Many market participants saw the stock&#x27;s crash on its debut as a sign that investors had become disillusioned with a recent string of IPOs with inflated valuations.<\/p>\n<p>Paytm&#x27;s listing could bring &quot;an end to obnoxious pricing in IPO markets&quot;, Mumbai-based investment advisor Sandip Sabharwal said, adding that too many of the companies did not have a clear path to profitability.<\/p>\n<p>Engineering graduate Vijay Shekhar Sharma founded\u00a0Paytm\u00a0in 2010 as a platform for mobile recharges. The company grew quickly after ride-hailing firm Uber listed it as a quick payment option in India and its use swelled further in late 2016 when New Delhi&#x27;s shock ban on high-value currency notes boosted digital payments.<\/p>\n<p>Paytm&#x27;s success has turned Sharma, a school teacher&#x27;s son, into a billionaire with a net worth of $2.4 billion according to Forbes. Its IPO has also minted hundreds of new millionaires in a country where per capita income is below $2,000.<\/p>\n<p>Source: <a href=\"https:\/\/www.cnbc.com\/2021\/11\/18\/india-paytm-makes-stock-market-debut.html\" target=\"_blank\" rel=\"noopener\">Read Full Article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Shares in India&#x27;s\u00a0Paytm\u00a0plummeted 24% in their maiden day of trade, with investors questioning the loss-making digital payments firm&#x27;s business model. Shares were changing hands at [&#8230;]<\/p>\n","protected":false},"author":3,"featured_media":123109,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.7 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Shares in India&#x27;s Paytm plunge 24% in market debut, investors question business model - Fin2me<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/fin2me.com\/markets\/shares-in-indias-paytm-plunge-24-in-market-debut-investors-question-business-model\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Shares in India&#x27;s Paytm plunge 24% in market debut, investors question business model - Fin2me\" \/>\n<meta property=\"og:description\" content=\"Shares in India&#x27;s\u00a0Paytm\u00a0plummeted 24% in their maiden day of trade, with investors questioning the loss-making digital payments firm&#x27;s business model. 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