In India’s biggest IPO Paytm’s parent firm One 97 Communications on Thursday listed on the bourses,but at a discount. Its shares listed at Rs 1,955.00 per piece, a 9 per cent discount from the issue price band of Rs 2,080 to Rs 2,150 per share.
The share price further slipped to Rs 1,564 on BSE, down 27 per cent from its issue price. Finally, it ended at Rs 1,564.15.
“It was incidental from the weak response received from the public as the retail portion was subscribed only 1.66 times & NII (Non-institutional investors) 0.24 times. Also, it’s a loss-making company as it declared a net loss of Rs 4,230 crore, Rs 2,942 crore & Rs 1,701 crore respectively for FY19, FY20 & FY21,” said Rahul Sharma, Co-Founder, Equity99.
Analysts say that investors can continue to hold shares for long-term results. They also say that long-term investors can wait for dips and keep a tab of corporate developments before adding more units of Paytm to their portfolio.
“Aggressive investors who got the allotment can hold the stock with a long-term view however the investors who applied for listing gain can exit on the bounce-back. New investors are advised to look for other opportunities where other companies can perform much better than Paytm. We feel the company sought high valuation due to its brand value and it might see a correction in the near term”, said Parth Nyati, Founder, Tradingo.
Santosh Meena, Head of Research, Swastika Investmart Limited says that investors who put their money in Paytm expecting listing gains should have a stop loss below Rs 1,720.
“It is difficult to value such kind of companies for time being, but until then the market will focus on how fast they become profitable,” said Meena.
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