Mega issue, disaster debut: Paytm lists at 9.30% discount

Shares of digital payments company Paytm’s parent One97 Communications did a tepid listing on Thursday. Shares of the fintech company opened for trading at a 9.30% discount over the issue price of Rs 2,150 per share. The stock opened at Rs apiece on the National Stock Exchange (NSE) and at Rs 1,950 and on the BSE it is trading at Rs 1,955.

The Rs 18,300 crore issue making it the largest issue so far in India received bids for 9,14,09,844 shares as against 4,83,89,422 shares on offer, according to stock exchange data. The issue was subscribed 1.89 times. The retail individual investors category was subscribed 1.66 times. The qualified institutional buyers (QIBs) category was subscribed 2.79 times and non-institutional investors category was subscribed 24%.

The IPO consisted of a fresh issue to raise Rs 8,300 crore and an offer of sale (OFS) worth Rs 10,000 crore. Out of the net proceeds, the company proposes to utilize Rs 4,300 crore towards growing and strengthening Paytm ecosystem, including through acquisition and retention of consumers and merchants and providing them with greater access to technology and financial services, Rs 2,000 crore for investing in new business initiatives, acquisitions and strategic partnerships and balance for general corporate purposes.

One97 Communications (Paytm) is one the largest payments platform in India based on the number of consumers, number of merchants, number of transactions and revenue ended March 2021. The company launched Paytm in 2009, as a mobile-first digital payments platform to enable cashless payments for customers giving them the power to make payments from their mobile phones. It started with bill payments and mobile top-ups as the first use cases, and Paytm Wallet as the first Paytm Payment Instrument.

The Paytm app is a payments-led super-app offering consumers with innovative and intuitive digital products and services. It offers consumers a wide selection of payment options on the Paytm app, which include (i) Paytm Payment Instruments, which allow them to use digital wallets, sub-wallets, bank accounts, buy-now-pay-later and wealth management accounts and (ii) major third-party instruments, such as debit and credit cards and net banking.

The company posted a revenue of Rs 890.8 crore and a net loss of Rs 381.9 crore in the quarter ended June 2021.