Mumbai: Digital payment company Paytm’s initial public offering (IPO) made a weak debut at the markets on Thursday as the stock crashed over 27 per cent.
With a valuation of Rs 18,300 crore, the IPO is the biggest so far in India and the fourth biggest globally by any such firm.
In fact, the stock hit its lower circuit limit of Rs 1,564 on the BSE during late afternoon deals. When a stock hits its lower circuit limit, purchases by investors are restricted only to that price or higher.
Following the debut, Paytm’s market capitalisation fell from an IPO valuation of $20 billion to about $13.6 billion at the close of trade.
Even though Paytm expects to break even by late next year or early 2023, the company said in its prospectus that it expects to make losses for the foreseeable future.
However, investors and analysts seem to lack faith as they questioned the company’s lack of profits and lofty valuations.
The weak response is being viewed as a sign that investors had become disillusioned with a recent string of IPOs with inflated valuations.
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