One 97 Communications Ltd. tanked on its trading debut as investors questioned the Paytm parent's valuations and path to profitability. But Vijay Shekhar Sharma, chief executive officer and founder of the payments platform, is not “disappointed”.
New-age business models, such as his company's, take time to be understood by the markets, he said in a conversation with BloombergQuint's Ira Dugal. “We are not going to be driven by stock markets, because share prices are run by the opinions of buyers and sellers, which we have no influence on.”
Paytm stock listed at a 9% discount to its initial public offer price. It further slumped more than 25%. Its Rs 18,300-crore maiden issue, India's largest-ever, witnessed lukewarm demand.
Analysts weren't surprised though. Prior to the listing, Macquarie Capital Securities (India) Ltd. initiated coverage on the company with an ‘underperform' rating and a price target of Rs 1,200, implying an over 40% downside from the issue price. The company is a “cash guzzler” and achieving scale with profitability is going to be a big challenge, it said.
The market debut of Paytm — backed by Berkshire Hathaway Inc., SoftBank Group Corp. and Ant Group Co. — comes in a year when IPOs in India, according to Bloomberg data, have raised about $15 billion (Rs 1.11 lakh crore) so far this year, already an annual record by total proceeds.
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