13 Nov 2021

₹ 18,300 Crore IPO Paytm Prices Stock At Top Of Price Band

Reports are coming in that Paytm has priced its shares at the top of the range for its ₹ 18,300 crore initial public offering (IPO), a prospectus showed on Friday, even though the country's largest public issue was received with less enthusiasm than those of other tech firms.

Paytm, a payments company that markets an all-in-one app, priced its 8.51 crore-share issue at ₹ 2,150 each. It had flagged a price range of ₹ 2,080-2,150 per share for the deal.

The success of the IPO is seen as a precursor for more big-ticket public floats to come in the next year.

"It was expected that Paytm would price the deal at the top-end as the company's anchor-allotment was oversubscribed by more than 10-times," said Shifara Samsudeen, Equity Analyst at LightStream Research, who publishes on research platform Smartkarma.

Reports are also coming in that the company, formally known as One97 Communications, which had already raised $1.1 billion from anchor investors, has received $2.64 billion worth of bids for the remaining 4.84 crore shares on offer, or 1.89 times, according to stock exchange data published on Wednesday.

Paytm, which offers a range of services from banking, shopping, movie and travel ticketing to gaming, is expected to make its debut on bourses on November 18, the company said in its prospectus.

"Paytm's valuation is expensive but we think there will be some listing gains," Samsudeen said.

Paytm is backed by big investors like Ant Group and SoftBank's Vision Fund and its anchor investors included big names like BlackRock and Canada Pension Plan Investment Board.

"Qualified institutional buyers that have bought into the company know what they are investing in, they will not create panic on day one. They are not looking for one day gains," said Arun Kejriwal, founder of an independent research firm.

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