Shares of digital payment company Paytm plummeted on Thursday, 18 November, with the stock falling by 28 percent, hitting a low of Rs 1,560.
Paytm's parent company One97 Communications opened its stock for trading at Rs 1,950 on the NSE, a dip of 9.3 percent from its issue price of Rs 2,150, NDTV had reported earlier on Thursday.
On 8 November, Paytm had opened its Rs 18,300 crore share sale via an Initial Public Offering (IPO), the country's biggest ever. It was subscribed 1.89 times last week. On the Bombay Stock Exchange (BSE), Paytm stock opened for trading at Rs 1,955.
‘No Investor Comes for One Day'
However, even with the descent in shares, the company locked the valuation of more than Rs 1 lakh crore, NDTV reported.
As per analysts, the fall can be attributed to the firm's expensive valuations.
In a note to clients, experts at Macquarie Research stated that Paytm's business model was lacking 'focus and direction,' Reuters reported.
Speaking to NDTV, Paytm's founder Vijay Shekhar Sharma said that one day's loss does not show the whole picture.
"People need to understand that a payments company can expand to financial services, insurance, and investments. Since it is a first-of-a-kind business model it is tough for people to account for the business model. We need to explain our business model to people and then execute it on time. Then they will probably become more comfortable," he told the publication adding that no investor comes for one day.
It cannot be said that investors have lost wealth, he said. "One day's loss is not the whole picture." Sharma added that his company was growing on margin and would continue to expand.
Paytm Founder Turns Emotional at BSE
On listing day, videos of Paytm founder Vijay Shekhar Sharma emerged online, showing him wiping tears during an address delivered at BSE. The founder turned emotional as the firm completed India's biggest-ever IPO.
Sharma, an engineering graduate, had established Paytm in 2010.
"People tell me how do I raise money at such high prices, and I just tell them that I never raise money on the price, raise money on purpose," he said.
(With inputs from NDTV and Reuters.)
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