Shares of newly-listed One97 Communications, Paytm's parent company, continued to decline for the second day in a row on Monday, tumbling nearly 14 percent.
Paytm's market capitalisation has now slipped below Rs 1 trillion, according to a report in LiveMint.
The counter continued to bear a deserted look as the stock declined 13.66 percent to Rs 1,350.35 on BSE.
On NSE, it tumbled 13.39 percent to Rs 1,351.75.
At 1.05 PM, on the NSE, the shares were down 13.76 percent or (-)Rs 214.75 at Rs 1,346.05 apiece.
Shares of One97 Communications Ltd on Thursday made a weak market debut and tumbled over 27 percent from the issue price of Rs 2,150.
According to market analysts, concerns over valuation weighed on the stock.
Ant Group-backed Paytm's Rs 18,300 crore IPO, India's biggest share sale, was oversubscribed 1.89 times earlier this month.
This was greater than miner Coal India's Rs 15,000 crore offer a decade back.
Incorporated in 2000, One97 Communications is India's leading digital ecosystem for consumers and merchants.
Sebi to question investment banks
Sebi is planning to question the investment banks that handled Paytm’s initial public offering (IPO), over the listing debacle, according to a report in Business Standard.
Macquaries releases second report on Paytm
According to a second report by brokerage firm Macquarie, “Paytm’s valuation---is expensive, especially as profitability should remain elusive for a long time. We recommend UP with TP of Rs 1,200 valuing company at 0.5x PSg on Dec-23 annualised sales,” the report said.
According to a report in Indian Express, Macquarie Research noted earlier that Paytm’s valuation was “expensive” — 26 times its estimated price-to-sales ratio for 2022-23, when the global benchmark is 0.3-0.5 times the price-to-sales growth ratio for fintech firms.
Santosh Meena, Head of Research, Swastika Investmart Ltd. had said after the stock got listed that, "Paytm 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 1720 which is 20% lower than the issue price."
Paytm was listed at Rs 1,955, a discount of 9 per cent, on the BSE and plunged to close at Rs 1564.15, down by 27.24 per cent from the IPO price.
Paytm launched India's largest-ever IPO on November 1 with a price band of Rs 2,080- Rs 2,150 a share. The size of the IPO was Rs 18,300 crore — Rs 8,300 crore through fresh issue of equity shares and Rs 10,000 crore through an offer for sale (OFS).
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