Shares fell about 25% when Paytm started trading on the Bombay Stock Exchange, with shares trading at 1,614 yen after opening at 2,150 yen, giving the company an estimated valuation of 14.2 billion dollars, according to several reports.
After the largest ever IPO in India, founder and CEO Vijay Shekhar Sharma told Reuters he was not flustered by the initial drop in prices.
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“One day does not decide our future,” he said. “It’s a new business model and it takes a lot for someone to understand it directly [sic] … we have a lot to contribute to markets and market participants. “
Backed by Warren Buffet’s Berkshire Hathaway, Jack Ma’s Ant Group and Masayoshi Son’s Softbank, Paytm raised $ 2.5 billion during its initial public offering (IPO) and went from a payments app to a platform. full service offering insurance, airline tickets, banking, and more.
Paytm plans to break even in the first months of 2023, a source told Reuters in July, although its prospectus said losses were likely in “the foreseeable future.”
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“Paytm’s financial data is not very impressive and growth prospects appear limited … obviously the company does not have a clear path to earnings,” said Shifara Samsudeen, analyst at LightStream Research who publishes on Smartkarma.
The company recorded losses totaling 3.82 billion yen ($ 51.5 million) in the quarter ended in June, more than the loss of 2.84 billion yen for the same period in 2020.
Several Indian startups have raised funds through public offerings. Zomato Ltd. food delivery platform. went public earlier this year, and the Oyo hotel chain plans to sell the equivalent of $ 1.14 billion in an IPO.
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Founded in India in 2010, Paytm has offices in Salt Lake City, Utah, and Toronto, Canada. He works with 20 million businesses and 350 million clients.