One97 Communications Ltd, the operator of digital payments venture Paytm, crashed 27.25% on its stock exchange debut on massive selling pressure after floating India’s biggest initial public offering.
Paytm shares began trading on the BSE at Rs 1,955 apiece versus the initial public offering price of Rs 2,150. The shares fell to a low of Rs 1,564 in late afternoon trade and remained locked in at the 20% lower circuit.
The company now commands a market capitalization of Rs 1.01 trillion, or about $13.65 billion, as against the valuation of Rs 1.4 trillion it sought at the IPO price of Rs 2,150 per share.
The shocking debut means Paytm is now worth less than food delivery company Zomato, which went public in July and made a spectacular debut with a gain of 66%. Zomato’s market valuation is now at Rs 1.21 trillion.
Another new-age technology company that recently went public is omni-channel beauty retailer Nykaa, which gained 96% on its debut. Nykaa’s shares, however, have fallen from the highs, and the company is now valued at Rs 1 trillion.
The BSE benchmark Sensex declined 0.62% on Thursday to end at 59,636.01, the lowest level in about three weeks.
Paytm’s weak start came after its IPO received a tepid response and was subscribed barely 1.9 times the shares on offer. Institutional investors bid for 2.8 times the shares reserved for them while the non-institutional investors’ portion was covered just 24%. Retail investors’ quota was covered 1.66 times.
The Paytm IPO issue, including the anchor book, was worth Rs 18,300 crore (around $2.5 billion) comprising a fresh issue of shares to garner Rs 8,300 crore and an offer for sale of Rs 10,000 crore.
One97 Communications had initially filed for a Rs 16,600 crore ($2.2 billion) initial public offering, nearly a decade after scrapping a proposed IPO in a different avatar when it was a mobile value-added services provider.
Sapphire Foods India Ltd’s shares made a strong start and listed at an 11% premium to its IPO price at Rs 1,311 apiece and touched a high of Rs 1,383.60 before erasing most of its gains.
The stock ended at Rs 1,216.05 per share on the BSE versus the issue price of Rs 1,180. The positive start follows an IPO that was subscribed 6.6 times with demand across investor categories.
Sapphire Foods, the franchisee of Yum Brands Inc, now commands a market capitalisation of Rs 7,727.09 crore as against a valuation of Rs 7,498 crore ($1 billion) at the upper end of its Rs 1,120-1,180 price band.
The IPO comprised a sale of about 17.5 million shares by its controlling shareholders and investors including private equity firms Samara Capital and CX Partners. It did not raise any fresh capital.
Before the IPO, the company raised growth capital from India- and Southeast Asia-focussed private equity firm Creador in a transaction that also involved some existing investors making a partial exit.
Creador and secondaries specialists NewQuest Capital and TR Capital had invested Rs 1,150 crore (about $155 million) in August. This helped CX Partners, Samara Capital, Goldman Sachs and Edelweiss PE clock partial exits.