Paytm’s stock market woes continued on Monday, with its parent company One97 Communications’ stock falling nearly 17% at roughly 12 p.m. The bad run continues since its listing on BSE and NSE on the last day of the trading the previous week.
When compared to its IPO issue price of $28.94, Paytm’s stock has dropped almost 40% in just two trading sessions. Paytm’s stock market meltdown in the previous day wiped off $4.7 billion in investor capital. Its shares fell again today, increasing the number of losses. The shares are currently down by 13.03% and 12.89% on BSE and NSE respectively.
At 11:40 a.m. IST on the National Stock Exchange, Paytm shares were trading at $18.50, down 11.82 percent from their previous closing price. On the BSE, Paytm’s stock fell 12.73 percent to $18.35. Paytm shares began at $20.16 on the BSE before falling further as investor sentiment remained low. Its stock had dropped more than 17% at 12 p.m. IST.
The Reason behind continued sluggish performance
The stock price sluggish performance has been attributed to the company’s high valuations, according to analysts.
Paytm’s share price is expected to stay depressed in the short to medium term, according to several analysts, as investors are wary of the current volatility and market sentiment.
According to a report constituted by foreign brokerage firm Macquarie, “Paytm has been a cash-burning machine, spinning off several business lines with no visibility on achieving profitability. Unless Paytm lends, it can’t make significant money by merely being a distributor.”
Paytm is a financial technology firm based in India that provides a digital payments platform as well as an in-house e-commerce site. On November 10, 2021, the company’s initial public offering (IPO) was closed to new investors. This stock was first traded on the Bombay Stock Exchange (BSE) and the National Stock Exchange of India on November 18, 2021. (NSE).
On the first day of its trading, the stocks dipped to 27% and closed at $21.06 against its opening price of $26.32.
Paytm is funded by Chinese entrepreneur Jack Ma’s Ant Group, SoftBank of Japan, and Warren Buffett’s Berkshire Hathaway, which own roughly a third of the company.