Paytm’s nightmare listing eclipses worst US flop debuts of similar size

This didn’t just mean that Paytm had — by far — the worst listing debut of the seven Indian tech startups that have gone public this year. Its day-one nightmare even eclipsed the worst trading debuts ever by US firms that raised at least $2 billion in their IPOs. Paytm had raised about $2.42 billion.

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ET
reported on November 17 that Paytm’s market debut was likely to be muted, given its grey market premium, but the 27.4% fall on day one took even the company’s biggest critics by surprise.

Shares traded at Rs 1,614 in afternoon from the offer price of Rs 2,150, giving the firm a market cap of about $14.2 billion. That’s less than that $16 billion Paytm was valued at in 2019 when it raised $1 billion from risk investors. Shares later
hit the lower circuit limit of Rs 1,564 on the Bombay Stock Exchange, allowing investors to only buy at that price or higher.

Seven Indian tech startups that have gone public so far this year. Three of these — CarTrade, Fino Payments Bank and now Paytm — ended their first sessions down from the listing price. While CarTrade’s stock plunged 7.29% on the first day, Fino’s fell 5.5%. At the other end of the scale, Nykaa
ended its first day with its stock up an astonishing 96.15%, while Zomato’s
stock was up more than 65% after its listing debut.

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Paytm’s founder and CEO Vijay Shekhar Sharma, who was visibly crying with joy at the opening ceremony, later told Reuters that he was unperturbed by the slide and did not regret listing in India.

“One day does not decide what our future is,” he said. “It is a new business model and it takes a lot for somebody to understand it straightforward… there is a lot for us to bring to the markets and the market participants.”

Paytm eclipses biggest US flops

Paytm’s 27.4% fall on day one also eclipsed the worst trading debuts by firms that raised $2 billion or more in their IPOs, according to data from Bloomberg.

The worst of these was the debut of trading app Robinhood in July. The company raised $2 billion in its IPO but its
shares fell 8.4% from the opening $38 to just above $34 at the end of the first day, giving it a market capitalisation of around $29 billion, short of the anticipated $35 billion. This meant Robinhood’s listing debut was the worst among 51 US firms that raised a similar amount or more in their IPOs, according to Bloomberg data.

Before RobinHood, the worst trading debut by a US company was that of another brokerage, MF Global Holdings Ltd, which went public in 2007. It ended its first day down 8.2%.

With inputs from agencies