MUMBAI, Nov 18 — Indian mobile payments giant Paytm lost a quarter of its value on its market debut today, after raising US$2.5 billion in the country’s biggest-ever IPO, as traders questioned whether the loss-making firm would ever turn a profit.
Founder Vijay Shekhar Sharma, once named as India’s youngest billionaire, wiped away tears from his eyes when the national anthem was played at the opening ceremony before trading began on the Bombay Stock Exchange. “There is a lot of euphoria for the digital space and that seems to now be subsiding,” said SMC Global Securities analyst Saurabh Jain.
Following the debut, Paytm’s market capitalisation fell from an IPO valuation of US$20 billion to under US$14 billion when shares dropped as low as 1,586 rupees. “I was planning to sell 50 per cent for listing gains and hold the rest. Now I have no choice but to hold on. If it goes anywhere close to my purchase price, I will definitely sell. I wouldn’t want to risk holding it further.”Sharma — a schoolteacher’s son who says he learned English by listening to rock music — retains a 14 per cent stake in the business, worth US$2.4 billion at the IPO price but approximately US$420 million less by lunchtime.
Paytm’s platform was launched in 2010 and quickly became synonymous with digital payments in a country traditionally dominated by cash transactions.