The sharp decline in Paytm shares over the last two trading sessions has got some investors baying for Uday Kotak's blood.
A chartered accountant and social entrepreneur Harshad Shah tweeted to Uday Kotak: @udaykotak please take responsibility for wrong pricing of #Paytam IPO and reward them to compensate the losses.
Uday Kotak responded with a tweet: Mr. Shah please get your facts right. Kotak did not lead manage Paytm. Kotak did lead manage Zomato at issue price 76( current market price 150), Nykaa at issue price 1125(current market price 2100).
Mr. Shah please get your facts right. Kotak did not lead manage Paytm. Kotak did lead manage Zomato at issue price 76( current market price 150), Nykaa at issue price 1125(current market price 2100). https://t.co/0G5SJeslkz— Uday Kotak (@udaykotak) November 22, 2021
Paytm shares nosedived further. At end of trading session on November 22, the shares declined 12.74 percent or Rs (-) 198.80 down to Rs 1,362.00.
At 1.05 PM, on the NSE, the shares were down 13.76 percent or (-)Rs 214.75 at Rs 1,346.05 apiece.
According to a report in Bloomberg, Vijay Shekhar Sharma held a four-hour town hall to rally employees who had watched the company’s stock plummet 27 percent on Thursday.
Sharma, who has tweeted about his admiration for Musk and his purchase of a Tesla vehicle, reminded employees that the electric vehicle maker’s stock used to be the among the most-shorted in the world. But the company overcame years of struggle to become one of the most recognized brands globally, he said, as well as the most valuable automaker in the world.
Macquaries releases second report on Paytm
Before Paytm's stock market debut, research house Macquarie had said, “Dabbling in multiple business lines inhibits Paytm from being a category leader in any business except wallets, which are becoming inconsequential with the meteoric rise in UPI payments. Competition and regulation will drive down unit economics and/or growth prospects in the medium term in our view.”
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.
S Murlidharan, FPJ columnist and a Chartered Accountant said, "Many industrialists have sent condolences to Sharma on the disappointing debut of Paytm. Their elegy is misplaced as Sharma has exited and made a killing through the OFS platform that rides piggy back on IPO."
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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