Paytm Plunges Another 7%, Stock Down 32% From IPO Price

Shares in One97 Communications, which operates Paytm fell another 7% in trade today eroding shareholder value by 32% from the IPO price. The company which had fixed its Initial Public Offering at Rs 2150 was last seen trading at Rs 1444, down 7.2% in trade on Monday morning.

Today's fall comes under the backdrop of stretched valuations for the company and over exuberance in the primary market. Most analysts including high profile foreign portfolio investors have suggested selling the stock on meaty valuations.

The mad rush for IPOs and stretched valuations for most companies coming out with public offerings is something that one needs to be cautious about. The massive losses in one of the largest IPOs in recent times has left many analysts questioning the valuations.

Industrialist Anand Mahindra compared the listing to a "casino-like feeding frenzy". "My heart goes out to individual IPO investors who must be rattled but I'm sure Paytm will find its right level. There is, however, a silver lining to this sobering debut: it could moderate the casino-like feeding frenzy for IPO listings & help restore the hunt for true value," he tweeted.

One97 Communications is a loss making company and essentially many feel that the IPO itself was overpriced.

Founded by Vijay Shekhar Sharma, the company became synonymous with digital transactions in a country that has traditionally been dominated by cash payments.