Digital payment firm Paytm disappointed investors with its tepid listing debut on Dalal Street on Thursday. The scrip listed at discount of 9.30 per cent at Rs 1,950 on the NSE against the issue price of Rs 2,150. On the other hand, it kicked off the day at Rs 1,955 on the BSE.
Earlier, the public offer, which opened for subscription on November 8, got subscribed 1.89 times on the final day of the offer on November 10. The company had fixed a price band of Rs 2,080-2150. Market watchers advised new investors to look for better opportunities than Paytm. Here’s what they have to say.
Rahul Sharma, co-founder, Equity99
Short term investors might remain in this counter as it might see some pullback. However, we don’t expect any momentum in long-term so long term investors may take an exit and wait for declines and to check the roadmap of development in the coming days before adding to the portfolios.
Akhil Rathi, vice president advisory, Marwadi Shares and Finance
Paytm saw a weak listing on account of expensive valuations and continues loss in past years. In upcoming quarters the company is expected to post-loss as its strategy is to grow consumer base, merchant base, advanced technology platform and rapidly scale up for other segments. Paytm will face tough competition and which will impact its market share. Long-term investors should avoid the stock and wait for better prices.
Parth Nyati, founder, Tradingo
The company has been loss-making and there is no sign to turn profitable in near future. Aggressive investors who got the allotment can hold the stock with a long-term view however the investors who applied for listing gain can exit on the bounce back. New investors are advised to look for other opportunities where other new edge companies can perform much better than Paytm. 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
It is difficult to value such kind of companies for time being. 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 because Bajaj Finserv has a proven track record with great comfort of valuations compared to Paytm.
Manoj Dalmia, founder and director, Proficient Equities
Paytm witnessed a weak listing as the company is overvalued at a price-to-sales (P/S) of 26 times as compared to global peers at 0.3 -0.5 times P/S. Besides, 75 per cent of promoters are from other countries and are selling stakes by the offer for sale worth Rs 10,000 crore which is more than 50 per cent of IPO value. Going ahead, RBI may bring policies for fintech in BNPL space and monetisation of UPI could trigger some game-changer that is free of cost currently.
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