15 with a gain of around 17%.įood online delivery company Zomato’s shares popped more than 70% in their debut in late July, which had buoyed expectations of spectacular share premiums among other digital firms. Online insurance aggregator Policybazar also debuted on Nov. 10 following its $713 million IPO, turning the company’s founder Falguni Nayar into India’s wealthiest female self-made billionaire. Indian e-cosmetic retailer Nykaa’s shares popped nearly 80% in their debut on Nov. Indian tech startups have queued up to list, hoping to take advantage of the sizzling markets to get rich share valuations, and the tepid response to Paytm’s share listing struck a sharp contrast to other recent IPOs. Since the October high, the index has fallen by 3.45% to 60,008 points. 19, up roughly 30% year-to-date as the economy recovers and COVID cases decline. India’s benchmark stock index, the Sensex, hit a record high of 62,156 points on Oct. On Tuesday, the Reserve Bank of India said in a report that equity valuations are too high by conventional yardsticks such as the share price relative to company’s earnings per share. Investors’ subdued response to Paytm’s share listing will not likely hurt the broader trend of global firms investing in Indian markets as an alternative to China, where a government crackdown on Internet firms, online tutoring, and real estate has rattled investors, analysts say.īut Paytm’s flop is likely to make India’s retail investors more skeptical about the performance of digital firms, analysts add. The company’s rapid expansion has been fueled by offering discounts and cash back to customers, but such incentives will prolong how soon it can turn profitable, says Tanushree Banerjee, co-head of research at Equitymaster, a company that provides investment advice. The company is likely to find it difficult to expand its customer base at the same rate as in the past because it will have to find growth in India’s rural hinterlands, where Internet penetration is relatively low compared to urban centers, Basumallick said. “It is okay that the culture (of Paytm) is to get more revenues, but do their businesses have a path to profitability?” said Abhishek Basumallick, co-founder of equity advisory firm Intelsense. Paytm also offers wealth management solutions and banking services.īut analysts said that investor sentiment toward the firm has soured because the company has failed to state how each of its business units will turn a profit. It makes money by charging large merchants a fee. Paytm serves more merchants than any other payments firm in India, with over 20 million partners in its network. Indians use the service to pay for a wide range of services, from taxi cabs to airline and movie tickets. Paytm is one of India’s largest digital payments companies with around 337 million users, 50 million of whom are active monthly users. It counts China’s Ant Group, Softbank’s Vision Fund, and Berkshire Hathaway among its investors. Paytm, the fintech company that Indians use for daily services like buying groceries and paying their electricity bills, narrowed its operating loss to INR16.55 billion ($220.6 million) in the financial year that ended March 2021 from INR 24.68 billion ($329 million) a year ago. Paytm is the second notable loss-making company after food delivery firm Zomato to raise money on Indian exchanges. Paytm’s shares were trading at a discount of 27.3% or INR 1564 ($21.15) per share at 1514 Indian Standard Time after opening at INR 1955 ($26.4), down from the issue price of INR2150 ($29).
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |