Shares of Paytm fell by 13% on its second trading day, after crashing 27% during their debut on the stock exchanges. The shares closed at Rs 1,360, 37% below the issue price of Rs 2,150. At Monday’s closing price, the company’s market capitalisation stood at £8.82 billion compared to the valuation of nearly £14 billion in its IPO - which means shareholders have lost about £5.1 billion in two trading days.
Shares of the payments company opened at Rs 1,500 on Monday, down from its previous close of Rs 1,564. Around noon, when the company hit a low of Rs 1,271 and was inching towards its 20% lower circuit band, there was buying support that lifted it to the closing level of Rs 1,360. Investors who have supported the £1.83 billion IPO include BlackRock and the Canada Pension Plan Investment Board.
The dismal performance of the company on the bourses was met with shock from investors. On social media, investors were looking for answers on why a company that received backing from blue-chip institutions and was subscribed 1.8 times tanked upon listing. This happened even as other startups such as Nykaa, Zomato and Policybazaar showed resilience after listing. The issue was managed by top global and Indian investment banks. Morgan Stanley, Goldman Sachs Group, Axis Capital, ICICI Securities, JPMorgan Chase, Citigroup and HDFC Bank were the book-running lead managers.
The company’s shares tanked even after it released data on Sunday where it said that both the gross merchandise value of transactions and lending activity in the second quarter saw a big jump.
