By Malvika Gurung
Investing.com -- The parent company of the digital payments major Paytm, One 97 Communications Ltd (NS: PAYT ) made its debut on Dalal Street today, trading 21.46% or 461.45 points lower at Rs 1,688.85 at 10:40 am on Thursday.
The stock opened at a discount of 9.3% against its issue price of Rs 2,150, at Rs 1,950/share on the NSE and 9.1% lower at Rs 1,955 on the BSE.
One97 Communications’ weak market debut comes after the company’s IPO was subscribed less than 2 times the shares on offer. Paytm being the country’s biggest public issue, raised a total of Rs 18,300 crore through its IPO.
The digital payments major witnessed a tepid response from investors, as the net qualified institutional investors subscribed for the company’s shares 2.79 times their quota, and retail investors also helped the company by subscribing 1.66 times the shares on offer, while the non-institutional investors subscribed only 24% of their quota.
Besides, before the company’s listing on the Indian bourses, Paytm’s shares had slid by Rs 25-35 in the grey market, due to extremely expensive pricing, neutral growth prospects and unimpressed financials.
As a result of Paytm’s weak performance on its first day of listing, research firm Macquarie has initiated an ‘Underperform’ rating on the company’s stock with a target price of Rs 1,200/share, on account of the company’s business model lacking focus, adding that the existing competition and regulation in the sector will lower the company’s growth prospects in the medium term.
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