For a company that grabbed our attention to launch a sizable initial public offering, Paytm’s market debut on Thursday presented the wrong kind of spectacle. Shares of One97 Communications, which owns the payments platform, fell nearly 27% (after listing at 9% below their issue price). This is in contrast to other startups including Zomato and Nykaa, whose newly listed shares got bumper openings.
Various factors seem to have been involved in the massive downfall of One97. Though startups have been the flavor of the year, talk of overpriced stocks has bothered many of them of late, with much enthusiasm among retail investors. The company is reporting losses, which would not be a cause for concern if analysts were equally bullish on its business prospects. However, its early proponent of offering a digital wallet, which positioned it well after demonetisation five years ago, has eroded as rival services based on the Unified Payments Interface such as PhonePe and Google Pay have taken this advantage. Major gains have been made in the area. online transactions. There is even tougher competition in Paytm’s e-com play. But again, it’s too early a stage to call the winners. A lot can change.
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