India's largest IPO Paytm got listed on the bourses today after its $2.5 billion IPO) was oversubscribed last week. A visibly emotional Founder and CEO, Vijay Shekhar Sharma was overwhelmed. "I am tearful. Whenever I say the words, 'Bharat Bhagya Vidhaata' it overwhelms me." He then went on to explain the phrase to shareholders and board members: "The one who will define the fortunes of this country."
Vijay Shekhar Sharma said that everyone at Paytm had done exactly what the phrase, "Bharat Bhagya Vidhaata" means. " Today is the day many of us never expected to happen, many of us never believed to reach here. . What a feeling! What a feeling!," he exulted.
Sharma then went on to say that the dreams of young India come along with him today to thank everyone for the momentous occasion. "Today is the day when dreams of young India come along with me to say thank you to every one in the room, thank you to everyone who believed and supported."
Paytm has had a phenomenal journey. Founded in 2000, One97, the parent company of Paytm, the firm began with catering to the mobile VAS (value-added services) market. In 2010, it launched the mobile recharge platform in 2010. Today it offers an entire bouquet of services from payments, credit, insurance, merchants, wealth management, and e-commerce services.
"People tell me how do I raise money at such high prices, and I just tell them that I never raise money on the price, raise money on purpose,” he said during his address.
Sharma said that he believes Paytm's success story will inspire 'millions' of entrepreneurs in the country. "I believe that Paytm inspires and hopefully will inspire millions of entrepreneurs that they can do it. That they can reach here."
In the moment of Paytm's biggest day, Sharma acknowleged the contribution of everyone associated with the firm. "I cannot put enough emphasis on the best team we put together...they would not stop at any hurdle. "
He then mentioned his mentor, Ravi Adusumalli--Paytm's first institutional investor whom he called as his co-founder, brother and mentor. "I thank my shareholders, board members and my co-founder-- Ravi Adusumalli, who I call my co-founder. Paytm would not have been here if he did not say: Go with it. Ravi, you have not been an investor, a brother, mentor, partner. I wish every one gets partners and friends like that."
Paytm shares to get tepid response
Parth Nyati, Founder, Tradingo said, "Paytm, formally called One97 Communications debuts today at exchanges which saw a dull response and got subscribed only 1.89 times from the investors which is much lower compared to the other recently listed companies. The company has been loss-making and there is no sign to turn profitable in near future. The company got listed at 1950 apiece on NSE which was in line with our estimates.
"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 bounceback. 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."
As per stock market experts, the public issue received low response from investors and this may be seen in its listing too. They said that Paytm share price may have a 'tepid' debut today, according to LiveMint.
Akhil Rathi Vice President Advisory at Marwadi Shares and Finance Ltd, said, "Looking at Paytm financials for last three years, there is no major change in top line but losses have reduced as company has spent less for customer acquisition. In upcoming quarters the company is expected to post loss as company strategy is to grow consumer base, merchant base, advanced technology platform and rapidly scaling up for other segments. On Valuation front company is going to list at a Market Cap/Sales of 44.36 with a market cap of Rs.13, 93,788 mn and we expect a flat listing as valuations are demanding for a loss-making company and long investors should wait for better prices to enter the stock and watch out company growth in future."
Santosh Meena, Head of Research, Swastika Investmart Ltd, said, Paytm, "the biggest IPO in India so far debuted the secondary market on a weaker note as compared to our expectations of a flat listing. The company has a huge customer base with strong brand positioning and it has an early mover advantage in digital payment services. However, it is still a loss-making company and very aggressively priced. therefore we saw a tepid response in terms of subscriptions.
"It is difficult to value such kind companies for time being, but by the time market will understand the way to value such kind 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 because Bajaj Finserv has a proven track record with great comfort of valuations compared to Paytm. Those who played for listing gain should keep a stop loss below 1,720 which is 20 percent lower than the issue price."