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Paytm Shares make a listing on NSE at Rs. 1955, with 9% discount

22 December 20225 mins read by Angel One
Paytm Shares make a listing on NSE at Rs. 1955, with 9% discount
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The stock price of the company, which became India’s most valuable startup, went down 9% on the National Stock Exchange. On the Bombay Stock Exchange, the shares of Paytm started trading at 1,955 per share. Despite the discounted listing of the share, its market capitalization has crossed the Rupee One Trillion mark.

One97 Communications’ IPO was launched on November 1. In three days for which the offer was open for subscription, the applicants were allowed to apply for the Paytm IPO shares at a price ranging between Rs. 2080 and Rs. 2150 per unit.

The country’s so far one of the biggest initial public offerings saw a subscription of 1.89 times, with the institutions flooding the market with their bids. The details are showcased in tabular format ahead in this article.

Final Status of Subscription Before Closing

Here’s a quick look at the final status of Paytm IPO on the third day of the offering. We have included the status on the first and the second day as well for comparative analysis.

Participants First Day Second Day Third Day
Qualified Institutions 0.06 0.45 2.80
Non-institutions 0.02 0.05 0.23
Retailers 0.78 1.23 1.67
Total 0.18 0.49 1.90

Further Key Data Points

The IPO included the fresh issue of the stocks with a value of Rs. 83 billion and the offer for sale of shares valuing close to Rs. 100 billion. The founder of the company decided to off-load his holding by Rs. 4 billion.

This kind of had an alarming effect on the applicants and the subscription of this large-scale offering did not attract as many investors as it should have. This led to a situation of low demand in the grey market as well.

Vijay Shekhar Sharma is an engineer from Delhi who founded Paytm in 2010. He is the CEO of One97 Communications, India’s one of the major digital payment platforms. In 2017, he ranked as one of the youngest entrepreneurs with billions of net worth.

After today’s listing of Paytm IPO shares, Mr Sharma became a billionaire with a net worth of approximately $2.4 billion, as per the reports issued by Forbes.

While brokerage firm Macquarie Research initiated an underperform rating on One97 Communications, it pointed out the company’s business model lacks direction and focus.

The Bottomline

  • One97 Communications’ shares opened at a low of  1,950 on the National Stock Exchange on Thursday, marking a decline of over 9 percent from its issue price.
  • As of 11:30 AM, the Paytm Share Price made a low of Rs. 1585, which is lower by 25%. The selling is being triggered due to discounted listings. Investors who purchased for listing gains are not exiting their positions.


What is a discounted listing of an IPO?

A discounted listing occurs when a stock ends below its issue price. This causes retail investors to miss out on the listing gains. Listing at discount is the opposite of listing on premium.  If you apply for an IPO at Rs. 100 and it lists at Rs. 90, it is said to have been listed at a 10% discount. Similarly, then it is listed at, say Rs. 110, then it is said to have been listed at a premium of 10%.

Why does a stock list at discount?

A stock could list at discount owing to various reasons such as low demand or heavy pricing. An issue could face low demand due to the current state of the markets. Under-subscription could also happen due to the mix of domestic and global triggers. Aggressive pricing is often the reason for an IPO listing. In the past, many non-life insurance companies have been able to raise funds at the upper end of their valuations band.

What was the position of Paytm IPO shares in the grey market before listing?

The shares of Paytm share price were floating at discount in the grey market before its listing. Though the discount was not as deep as it was witnessed at the time of its debut. Earlier today, it was at a discount of around Rs. 30 per unit.


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