Paytm Share Price: Paytm’s market cap slips below Rs 50,000 cr as stock hits new low

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NEW DELHI: Shares of One 97 Communications (Paytm) hit a fresh low in Monday’s trade, with its market value falling to sub-Rs 50,000 crore levels.

At 2.45 pm, the stock was trading 3.75 per cent lower at Rs 755.50. At this price, the company was commanding a market value of Rs 48,996 crore. The script hit a new low of Rs 751 intraday.

The shares, listed on November 18 last year, enjoyed a market value of just over Rs 1.39 lakh crore at the issue price of Rs 2,150.

“The whole world was gung-ho about the startup valuations the way Paytm, Nykaa and Zomato IPOs came. Today, they are down 65-70 per cent from their IPO prices and this is a reality check for them. In private, closed markets , the price discovery is not perfect. That price discovery is also governed by multiple protection clauses that there is anti-dilution clauses. It is a private club, and the whole market is driven by higher and higher valuation,” said Rajeev R Shah, MD & CEO, RBSA Advisors LLP.

Shah said once, “If you are not going to earn cash for the next three-four-five years, how are you going to convince the larger institutional investors. Once they have the glare of public markets, most of them will flooder, and that is also actually visible in the valuations,” Shah said.

Neeraj Dewan, Director at Quantum Securities, said he was wary about the business model and the valuation, which Paytm was getting.

“Even after the correction, I am not looking at that stock. There is so much competition for them and I am not too clear about the business model and how they will be a little different from what the others are giving. You have other options available and I think one can choose so many of them. There is no comparative advantage I see in a company like Paytm,” he told ET NOW last week.

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