Fintech firm Paytm’s parent One97 Communications is set to list on bourses on Thursday. However, industry watchers do not see fireworks on the listing as shares of the company traded at a discount in the unlisted market in the morning trade on November 17.
The Rs 18,300-core IPO, which got subscribed 1.89 times, was opened for subscription from November 8 to November 10. The portion set aside for retail investors was subscribed 1.66 times, while the reserved portion of non-institutional investors subscribed 24 per cent. Qualified institutional buyers put in bids 2.79 times the portion allocated for them. The company had fixed a price band of Rs 2,080 to Rs 2,150 for the initial share sale.
While sharing his expectations from Paytm’s listing, Abhay Doshi, founder of UnlistedArena.com said, “Shares of the company are available at a discount of Rs 20 in the unlisted market. Paytm was the most trending IPO since the company revealed its IPO plans but as the issue floated for a subscription it got a very tepid response from investors due to expensive pricing and losses incurred on the financial front.”
“The subscription figures indicate very low demand and this may be seen in its listing too. I am hoping for a flat listing and won’t be surprised if it lists at a discount,” Doshi added.
The Vijay Shekhar Sharma-led firm will use the proceeds of the share sale to strengthen its payment ecosystem and for new business initiatives and acquisitions.
According to Anand Rathi Share and Stock Brokers, the upper price band of the IPO indicates that One97 Communications is offered at a price-to-book (P/B) of 9.5 times with a market capitalisation of Rs 1,39,379 crore.
Dinesh Gupta, director, Unlisted Zone also added that shares of the company may list at a discount due to higher valuations. “It is a real test for FIIs also as they put their money in Digital India,” he added.
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