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Global market conditions impacted Paytm IPO, says Vijay Shekhar Sharma

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Paytm’s shares are trading for less than half its IPO listing price currently, with Macquarie analysts pegging a target price of Rs 900 for the scrip.

Global market conditions impacted Paytm IPO, says Vijay Shekhar Sharma
Paytm Co-Founder has blamed global market conditions for his company’s poor primary listing debut. Vijay Shekhar Sharma, the Co-Founder of One97 Communications Ltd, which owns Paytm, said Paytm’s IPO listed at a time when global markets were already risk-averse due to a confluence of factors, which then affected the IPO’s performance.
“Globally, we probably went in at a time when QE, free money and many other parameters brought a little spook out of the market. South American companies are over 70 percent down. That's not the reason completely. That's a macro reason,” Sharma said at the IAMAI’s India Digital Summit 2022, while talking to Sequoia Capital Managing Director Rajan Anandan.
Sharma added that Paytm’s business performance has been improving and has a strong outlook, especially with revenues from the payment service and increasing credit business.
“The success of Paytm will depend on what we do with monetisation led by financial services. Payment is a revenue line item which is growing massively. This quarter we are talking about $100 million revenue from payments, which is like a sizeable revenue,” Sharma added.
The contribution from payment services continues to be in the double digits for Paytm, with Sharma adding that the growth forecast for the segment is pegged at 50-60 percent YoY. He added that quarterly revenue from payments clocked in at $140 million, if merchant services were included.
Sharma also added that Paytm was now processing more loans than Bajaj Finance, one of the leading names in the loan segment of the market. “For our credit business, we should be benchmarked against only one guy and that is Bajaj (Finance). We (Paytm) should be looked at for the scale we deliver in terms of total loans, value of loans, and quality of loans,” he said.
Despite his statements, Paytm has continued to slide rapidly. Paytm shares closed at an all-time low of Rs 1,031.4 on January 13, less than half of the value of its IPO price of Rs 2,150. The company has seen a precipitous 33.77 percent drop over the past month. While Macquarie analysts have pegged a target price of Rs 900 for the scrip, other brokerages like Morgan Stanley, JP Morgan and Goldman Sachs, among others, have set up bullish target prices in the range of Rs 1,600-1,900.
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