Paytm‘s shares suffered a downfall at least by 17.97% on their second day of trading. The financial service provider on Thursday, made one of the worst major stock market debuts in India, as its shares fell over 28% after the country’s largest-ever initial public offering (IPO).
Reportedly, Paytm’s IPO was subscribed 1.89 times last week. According to the BSE index, the stock reached an intraday low of Rs 1,283.
The reason behind the downfall in its stock price is due to the firm’s expensive valuation, as stated by the analysts.
Besides, several markets participants witnessed the stock’s performance as a sign that investors had become disillusioned with a current branch of IPOs marking inflated valuations.
Paytm’s IPO gathered a fresh issue of Rs 8,300 crore and also an offer for sale (OFS) by existing shareholders worth Rs 10,000 crore.
It assigned shares valuing Rs 8,235 crore to over 100 institutional investors, including Singapore’s government.
122 institutional investors, who brought more than 3.83 crore shares from Rs 2,150 apiece showed interest in the firm.
Meanwhile, Paytm is supported by Chinese major Ma’s Ant Group, along with Japan’s SoftBank and Warren Buffett’s Berkshire Hathaway which own almost a third of the company.
