Raising money for the country’s biggest IPO was not easy, these difficulties came in the way


Paytm IPO: There was little enthusiasm among investors regarding the Initial Public Offer (IPO) of Paytm’s parent company One97 Communications. If compared to other IPOs that came close to it or say, then only better response was seen in them.

Paytm somehow managed to get the full subscription for its Rs 18,000 crore IPO on the very last day of bidding. This is a fact that was hardly heard between the recent rally in the stock market and the IPO boom. And compared to the IPOs of other tech companies and other startups, there was a trend of subscription manifold in them. On the last day of bidding, Paytm’s IPO was subscribed just 1.9 times.

The start of its subscription was very slow from day one. It was 18% subscribed on the first day of bidding and 48% on the second day. Non-institutional investors (NIIs) showed little interest in the issue. The portion reserved for NII could only get 24% subscription till the last day. NII, also includes Individuals with High Net Worth (HNIs). On the other hand, the portion reserved for retail investors got 1.6 times more subscription.

finally successful company

The Qualified Institutional Buyers (QIB) category saw 2.8 times more subscriptions on the last day. Paytm had reserved about 2.63 crore shares for the QIB. On the first day, bids were received for only 6% of the shares reserved for the QIB category.

Although Paytm’s IPO got more bids than the issue size till the last day, it did not see the huge enthusiasm like other startups like Nykaa, Zomato and Policybazaar.

low response was the reason

The valuation of Paytm’s issue is about 50 times its FY21 revenue. It looks expensive when compared to its counterparts listed in the international market. At the same time, it was also finding it difficult to understand the business like its super-app in the minds of people.

Experts had mixed opinions on the company’s performance. Some said that the company is promoting itself as a super-app, which is providing all services from flight booking to stock buying in one place. At the same time, some felt that the company was struggling only on selling its business model.

Nykaa IPO

Nykaa’s IPO fared far better than Paytm. Its IPO had got 1.5 times subscription on the very first day of the start of the bidding. At the same time, by the end of the bidding on the third day, Nyka got 80 times more subscription. Nykaa got 91 times more bids in the QIB category and 112 times more in the NII category. Whereas retail investors bid 1.8 times higher.

PolicyBazaar IPO

The Rs 5,000 crore PolicyBazaar IPO got 0.50% subscription on the first day. On the second day this IPO was fully subscribed and by the end of the bidding on the third day it got 16.5 times more subscription.

Zomato IPO

Zomato’s IPO got 40 times more subscriptions. Retail investors had bid for their share in the company at 78 times the reserve share. On the other hand, 55 times more bids were seen in QIB category and 35 times in NII category.

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Paytm brought the country’s largest IPO, once the owner of the company had to take a loan at 24% interest!



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