Paytm, China’s biggest public listing on the Stock Exchange of India (NSE), is giving investors cold feet, with shares closing below its market debut in November as the company’s road to profitability remains full of potholes.
Prices fell 5.6% to 1,321 rupees ($17.37), capping a week of declines that dipped to a low near 16%. A subsidiary of One 97 Communications, Paytm raised $2.5 billion in its IPO, but its market debut on Nov. 18 saw prices freefall 27%. Its stock is now down almost 39% from its issue price of 2,150 rupees ($28.28).
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“Paytm shares will continue to be under pressure as there is clearly no follow-up buying by large institutional investors even at this price,” Abhay Agarwal, fund manager at Mumbai-based Piper Serica Advisors Pvt. said. “[The] main reason for this is the company’s inability to coherently articulate a path to profitability.”
Financial results for One 97 in November — its first as a public firm — showed widening losses of $62 million July to September from the previous year along with increased expenses. The local brokerage firm Dolat Capital Market Pvt., however, still rated Paytm a buy at a target price of 2,500 rupees ($32.89)and anticipated that the firm would turn a profit by March 2026, Bloomberg reported.
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On the other hand, JM Financial Institutional Securities Ltd. has rated Paytm stock as a sell, while Macquarie Capital Securities rated it as underperforming.
“In a market that is already under pressure, investors are scurrying for safety and away from loss-making companies like Paytm,” Agarwal said.
An Indian multinational technology company that specializes in digital payment systems, eCommerce and financial services, Paytm is headquartered in Noida, India. The company was founded by Vijay Shekhar Sharma in August 2010.
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