After ‘Listing Loss’ in the stock market, know how Paytm’s IPO pulled out of investors’ eyes

Paytm IPO: On Thursday morning, when the largest Paytm IPO in IPO history was being listed on the stock exchange, its founder Vijay Shekhar Sharma started crying in the stock exchange. But after the listing of Paytm, as the shares of Paytm started trading in the market, the eyes of the shareholders who were allotted the shares of Paytm came with tears.

Listing Loss to Investors

Like the disappointment of Paytm’s investors, such a disappointment did not happen to investors of any IPO during the listing in the recent past. The Rs 18,300 crore Paytm IPO cost investors Rs 38,000 crore within a few hours of listing.

Before listing in the stock market, the market value of Paytm was Rs 1.39 lakh crore according to the IPO price and today when it was listed, its market cap has come down to Rs 101,182 crore. That is, there was a breach of Rs 38,000 crore in the direct market cap.

The fall in Paytm was such that the stock hit the lower circuit on the very first day of its listing. At the end of today’s business, Paytm closed at Rs 1560.80, down 27.40 percent. Meaning, the stock of Paytm has closed by going down by Rs 590 from its issue price of Rs 2150.

Brokerage houses cut target

It is believed that the trend of decline of Paytm does not seem to stop here. Because institutional investors are predicting further downside. Foreign brokerage house Macquarie has reduced the target of Paytm to Rs 1200. That is, about 44 percent below the issue price. According to Macquarie, Paytm’s business model lacks direction. According to him, making profit is a big challenge for Paytm.

After the listing of Paytm in the stock market, questions are being raised on its business model along with questioning its market valuation. Did Paytm keep its IPO price too high? Because there was no enthusiasm among the investors to apply for the IPO.

Small investors need to be cautious

One after the other, many fintech companies including other companies are coming up with their IPOs to raise money from the market. From small investors to institutional investors, a lot of money is being invested in IPO. During some IPO listings, listings are being done by going up to 200 percent above the IPO price. But according to experts, investors should be careful while investing in IPO. Their business model should be studied only then money should be invested.

Lessons for investors from Paytm’s IPO

Paytm’s IPO teaches a lesson to investors as well as promoters and merchant bankers of companies, who decide the price band of shares in their IPO at a higher price. An investor will invest in an IPO only when he expects returns. After this fate of Paytm’s IPO, many experts believe that the IPO market may get a setback. And many other companies which were preparing to bring their IPO, their plans can be dashed.

Disclaimer: (The information provided here is for informational purposes only. It is important to mention here that investing in the market is subject to market risks. Always consult an expert before investing money as an investor. Anyone from ABPLive.com Also investing money is never advised here.)

read this also

Know why petrol and diesel prices may be cheaper in future, how this reason is related to US and China

Stock Market Update: Indian stock market closed with heavy fall, Sensex 433 and Nifty slipped 135 points