{"id":262644,"date":"2022-11-24T13:33:00","date_gmt":"2022-11-24T13:33:00","guid":{"rendered":"https:\/\/haftavasool.com\/haftavasool\/?p=262644"},"modified":"2022-11-24T13:33:00","modified_gmt":"2022-11-24T13:33:00","slug":"paytm-shares-75-plunge-is-worlds-worst-in-decade-among-large-ipos","status":"publish","type":"post","link":"https:\/\/haftavasool.com\/haftavasool\/blog\/2022\/11\/24\/paytm-shares-75-plunge-is-worlds-worst-in-decade-among-large-ipos\/","title":{"rendered":"Paytm Shares’ 75% Plunge Is World’s Worst In Decade Among Large IPOs"},"content":{"rendered":"

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\"Paytm<\/div>\n

Paytm’s 75% slump is worlds worst for large IPOs in a decade<\/p>\n<\/div>\n

One 97 Communications Ltd., the operator of India’s largest digital-payments provider known as Paytm, has capped the worst first-year share plunge among large IPOs over the past decade — and the pain is worsening.\u00a0<\/p>\n

The company, whose founder compared its challenges to those faced by Tesla Inc.\u00a0shortly after<\/a>\u00a0the listing, has seen its stock erase 75 per cent of its market value one year after its $2.4 billion offering, the largest on record at the time in India.<\/p>\n

The dive is the steepest first-year slide globally among IPOs that raised at least the same amount since Spain’s Bankia SA’s 82 per cent drop in 2012, data compiled by Bloomberg show.<\/p>\n

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Paytm’s grim first anniversary underscores an erosion of confidence in its ability to become profitable after debuting at a time when India’s IPO market was enamored with tech startups. It’s one among a slew of startups that listed with valuations seen by many as exaggerated.<\/p>\n

The stock’s losses have deepened this week amid concerns over the emergence of a potential competitor owned by India’s biggest conglomerate.<\/p>\n

Last week, Japan’s SoftBank Group Corp.\u00a0sold shares<\/a>\u00a0it held in Paytm as a lock-up period set in the IPO expired, fueling a three-day slide.<\/p>\n

November’s 30 per cent slide has taken its decline from the IPO price of Rs 2,150 to 79 per cent.<\/p>\n

Tech Rout<\/strong><\/p>\n

Tech stocks globally have been sold off as investors shun loss-making firms amid a deteriorating macroeconomic environment, JM Financial Ltd. analysts led by Sachin Dixit wrote in a note this week.\u00a0<\/p>\n

\u201cThis feedback has been well received by company managements and we are seeing all Indian internet companies not just prioritizing profitability but also communicating the path forward explicitly,\u201d they wrote.\u00a0<\/p>\n

Paytm shares were sold at the top of a marketed range after an offering that attracted strong demand from individuals and funds, although they never traded above the listing price.<\/p>\n

The sale attracted traditional global stock pickers such as BlackRock Inc. and the Canada Pension Plan Investment Board.<\/p>\n

\u201cIn every rally, the market as a whole gets too excited about something,\u201d said Shridatta Bhandwaldar, head of equities at Canara Robeco Asset Management.<\/p>\n

\u201cIn 2006-2008, we got too excited about construction companies and capital goods companies. In 2013-2014, we got too excited about midcaps. In 2017-2019 we got extremely excited about non-banking financial companies and in 2020-2022 people were just too excited about technology.\u201d<\/p>\n

\u201cSome of these companies have good business models,\u201d he said, adding that \u201cstill, you feel there is not enough margin of safety because these are evolving businesses.\u201d<\/p>\n

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)<\/i><\/p>\n

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