Fintech startup One 97 Communications which operates Paytm is now bigger than 32 other private and public banks despite its tepid debut on Dalal Street on Thursday. With a market capitalisation of over Rs 1 lakh crore, the digital payment company now enjoys a higher m-cap than players like IndusInd Bank, IDBI Bank and Bank of Baroda.
Shares of Paytm listed at a discount of 9.30 per cent at Rs 1,950 on the NSE against the issue price of Rs 2,150. However, the scrip traded around 25 per cent down at Rs 1,613 at around 11 am (IST). The scrip listed at Rs 1,955 on the BSE.
The market capitalisation of other major lenders including Bandhan Bank, Canara Bank, Indian Overseas Bank, AU Small Finance Bank, Union Bank of India, IDFC First Bank, The Federal Bank, Indian Bank, Central Bank of India, UCO Bank, Bank of Maharashtra, RBL Bank and City Union Bank are hovering in between Rs 11,500 crore-Rs 50,500 crore.
HDFC Bank (m-cap: Rs 8.48 lakh crore), ICICI Bank (Rs 5.28 lakh crore), SBI (Rs 4.44 lakh crore), Kotak Mahindra Bank (Rs 4.06 lakh crore) and Axis Bank (Rs 2.18 lakh crore) are the top five banks in the country in terms of market value.
Paytm had negative cash flows from operating activities for FY19, FY20 and FY21, primarily due to operating losses and on account of additional working capital requirements. The company posted losses of Rs 1,701 crore in FY21, Rs 2,942.40 crore in FY20 and Rs 4,230.90 crore in FY19. On the other hand, players like IndusInd Bank and Bank of Baroda reported profits during these years.
Sharing his views with investors, Parth Nyati, founder, Tradingo said, “New investors are advised to look for other opportunities where other new edge companies can perform much better than Paytm. We feel due to the brand the company sought high valuation and it might see a correction in the near term.”
Santosh Meena, Head of Research, Swastika Investmart said, "It is difficult to value such kind companies for time being but by the time market will understand the way to value such kinds of businesses where the market will focus on how fast it will become profitable and how well it will use its strength to explore new businesses like credit card and payment banking. I would suggest only aggressive investors hold this stock for the long term amid uncertainty where I believe Bajaj Finserv is a much better option to play on fintech businesses."
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