Paytm Shares Plunge in India’s Market Debut

India, Paytm, crashes, market debut, IPO

Shares tumbled an estimated 25 percent in Paytm’s trading debut on the Bombay Stock Exchange, with shares trading at ₹1,614 hours after opening at ₹2,150, giving the company an estimated $14.2 billion valuation, according to multiple reports.

After India’s biggest IPO on record, founder and CEO Vijay Shekhar Sharma told Reuters that he was unruffled by the initial price drop.

See also: Paytm, India’s Largest IPO, Sees Slow Subscriptions

“One day does not decide what our future is,” he said. “It is a new business model and it takes a lot for somebody to understand it straightforward [sic] … there is a lot for us to bring to the markets and the market participants.”

Backed by Warren Buffet’s Berkshire Hathaway, Jack Ma’s Ant Group, and Masayoshi Son’s Softbank, Paytm raised $2.5 billion in its initial public offering (IPO) and had grown from being a payments app into a full-service platform offering insurance, plane tickets, banking, and more.

Paytm anticipates breaking even in the early months of 2023, a source told Reuters in July, although its prospectus indicated that losses were likely for the “foreseeable future.”

Read more: Paytm Might Fast-Track $2.2B IPO Post-Diwali

“Paytm’s financials are not very impressive and the growth prospects seem limited… obviously the company lacks a clear path to profits,” said Shifara Samsudeen, a LightStream Research analyst who publishes on Smartkarma.

The company posted losses totaling ₹3.82 billion ($51.5 million) in the quarter ended in June, more than the ₹ 2.84 billion loss for the same period in 2020.

Several Indian startups raised funds through public offerings. Food delivery platform Zomato Ltd. went public earlier this year, and hotel chain Oyo is planning to sell the share equivalent of $1.14 billion in an IPO.

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Founded in India in 2010, Paytm operates offices in Salt Lake City, Utah, and Toronto, Canada. It works with 20 million businesses and 350 million customers.