(Bloomberg) — Shares of India digital payments startup Paytm recorded their first day of gains since debut on Thursday, after two sessions of relentless selling wiped out more than a third of the stock value.
Paytm jumped 9.9% on Tuesday but was still about 30% down from its issue price of 2,150 rupees. Its parent company, One 97 Communications Ltd., raised a record IPO sum of $2.5 billion in India and has global institutions such as BlackRock Inc. and Canada Pension Plan Investment Board as cornerstone investors. Still, its 27% drop on the listing day marked one of the worst debuts by a major technology company globally.
The slump has cast a shadow over the prospects for technology firms that are in line to tap the market in what is supposed to be a breakout year for fund raising in the country. Its payment peer MobiKwik, which had been planning to go public, said it will list shares “at the right time.”
Companies have raised about $15 billion through IPOs this year so far in India, already an annual record by total proceeds. Yet, critics have been questioning valuations on some of these issues, given they are still loss-making companies.
Read: Paytm’s Debacle Casts Doubt Over IPOs for Indian Startups
“Only very aggressive investors should stay invested in the company while others should look at exit opportunities at any pullback,” said Santosh Meena, head of research at Swastika Investmart Ltd. “There is no apple to apple comparison for Paytm but there are better-listed fintech companies that are available with reasonable valuations with a certainty of growth.”
READ: BlackRock Sees ‘Continued Surge of IPO Listings’ in India
(Updates prices throughout)
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