Paytm’s shares fell more than 20 per cent from their issue price as the fintech group debuted on stock markets in India’s largest ever initial public offering, underscoring investor unease about its high valuation and uncertain business prospects.
The company raised $2.5bn through the listing, with its largest investors Ant Group and SoftBank, as well as founder Vijay Shekhar Sharma, all selling shares in the company.
The 11-year-old company aims to become India’s answer to Chinese financial “super apps” such as Ant, with businesses in everything from mobile payments to fantasy sports to gold trading.
But the IPO attracted tepid investor interest, with domestic institutions, including mutual funds, remaining cautious amid scepticism about Paytm’s path to profitability and ability to compete in mobile payments with competitors such as Google.
Paytm’s stock fell as much as 21 per cent, to a low of Rs1,705 ($23) a share in early trading on Thursday, from its issue price of Rs2,150. Its performance over the coming weeks will be closely watched as a gauge of whether public-market investors will back cash-burning tech businesses on the promise of future riches.