The company’s market cap has dipped below Rs 1 lakh crore, closing at Rs 88,184.67 crore.

A person holding a phone with Paytm splash screen with hands rested against a yellow table
Money Stock Market Monday, November 22, 2021 - 16:57

Paytm’s shares continued to tumble on Monday, November 22, after the stock dove on listing day making a weak debut in the stock markets. Shares of One97 Communications Ltd, Paytm's parent company, on Monday opened on the Bombay Stock Exchange at Rs 1500, and tumbled to Rs 1,271.25, before closing at Rs 1,360.30, down by 13%. On NSE, the stock closed 12.74% down at Rs 1,362. The company’s market cap has dipped below Rs 1 lakh crore, closing at Rs 88,184.67 crore and has been wiped out over Rs 50,000 crore market cap since listing.

On Sunday, Paytm said that its GMV, or gross merchandise value was up 131% in October on a year-on-year basis. It said that an increasing number of consumers and merchants are transacting on the ecosystem, and that the growth during the month was driven by festive season spends as well as an increase in the number of merchants and consumers. It said that its monthly transacting users were upto 63 million in October 2021 as opposed to 47 million in October 2020.

On listing day, the stock had tumbled over 27%. The stock had listed at Rs 1,955, down 9% from the issue price on the BSE. On the NSE, it debuted at Rs 1,950, registering a decline of 9.30% against the issue price. The stock plunged 27.44% to settle at Rs 1,560. According to market analysts, concerns over valuation weighed on the stock. "Paytm, the biggest IPO in India so far debuted the secondary market on a weaker note as compared to our expectations of a flat listing," Santosh Meena, Head of Research, Swastika Investment Ltd, said.

Macquarie Research said in its report last week that it believes Paytm’s business model “lacks focus and direction”, and called the company a cash guzzler. Macquarie said that while Paytm has dabbled in multiple businesses, it has inhibited the company from being a leader in any business except wallets. That too, it said, is becoming inconsequential with the rise of UPI.

“India's largest IPO of Paytm tumbled 27% on its maiden day, with investors questioning its business model and lack of profits along with lofty valuations," Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Ant Group-backed Paytm's Rs 18,300 crore IPO was oversubscribed 1.89 times on the last day of India's biggest share sale last week. This was greater than miner Coal India's Rs 15,000 crore offer a decade back. 

This also came on the day the Sensex plummeted 1,170 points. The 30-share BSE index ended 1,170.12 points or 1.96% lower at 58,465.89 in its biggest fall since April. Similarly, the NSE Nifty fell 348.25 points or 1.96% to 17,416.55.

With inputs from PTI

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