Paytm Shares Drop 13 Per cent As Lock-In Period For Anchor Investors Ends

Paytm was trading at Rs 1,269 early on Wednesday, compared to the offer price of Rs 2,150. Its shares crashed more than 27 per cent in since IPO debut last month

New Delhi: One97 Communications, the parent firm of Paytm, tumbled over 13 per cent as the lock-in period for the company’s investors ended on Wednesday, piling on more pressure.  

Paytm stock, which witnessed a dismal debut last month, was trading at Rs 1,269 early on Wednesday, compared to the offer price of Rs 2,150, and its shares crashed more than 27 per cent in India’s largest public offering (IPO) last month. Since the listing on November 22, the stock has clocked losses for 13 of the 18 sessions.

According to some analysts, the firm’s expensive valuations as the reason behind the plunge in its stock price.

After the listing of Paytm, its founder Vijay Shekhar Sharma had said, any day’s share price will actually never be a true reflection of the company’s opportunity and scale.

Paytm, which counts SoftBank and Ant Group among its investors, raised $2.5 billion in its IPO, of which $1.1 billion was from institutional investors.

This comes just days after the digital payments company announced the over twofold rise in its gross merchandise value (GMV) to about Rs 1,66,600 crore in the first two months of the third quarter of this financial year, driven by sharp uptick in loan disbursals.One97 Communications had recorded GMV of Rs 2,800 crore in the corresponding period a year ago.

Paytm refers to GMV as the value of total payments made to merchants through transactions on its app, through Paytm payment instruments or through its payment solutions, over a period. It excludes any consumer-to-consumer payment services such as money transfers.

The company in its regulatory filing said, “Growth momentum in GMV continues in the first two months of the quarter because of strong performance during the festive season, which continues post festive season.”

The number of loans disbursed from the Paytm platform increased over four times to 27 lakh during the reported period, from 5.30 lakh a year ago. The value of loan disbursed increased by 375 per cent on a year-on-year (y-o-y) basis to Rs 13,200 crore in the first two months of the quarter from Rs 280 crore.

Paytm had reported a net loss of Rs 473 crore in the September quarter compared to a loss of Rs 437 crore in the corresponding period last year. Revenue from operations in the Q2 of the current financial year stood at Rs 1,086 crore, compared to Rs 664 crore in the year-ago period, marking growth of 64 per cent.