One97 Communications, the parent company of payment platform Paytm, is all set to make its debut on Dalal Street today. The company’s shares will be listed on the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
India's largest IPO worth Rs 18300 crore was subscribed 1.89 times, with the qualified institutional buyer (QIB) portion of the issue seeing a subscription 2.79 times higher than its offer size.
Though the issue was oversubscribed, analysts described the response to the public offering as tepid when compared to some of the other IPOs that the country has witnessed recently.
For comparison, Nykaa’s issue was subscribed over 80 times, with QIBs oversubscribing their portion by 91 times; PolicyBazaar saw its issue being subscribed over 16.5 times with the QIB portion booked 25 times, and Zomato’s QIB section was subscribed over 50 times while the entire issue was booked 40 times.
Also read: Paytm is doing things in India that are anti-gravity, founder Vijay Shekhar Sharma tells employees ahead of IPO
On Wednesday, One97 Communications' shares were trading at a discount of Rs 20 in the grey market, though it had previously commanded a premium of Rs 50-70. The company’s price band was Rs 2080-2150 per equity share, with a lot costing investors Rs 12,900 at the upper price band.
The company's fresh issue of shares was worth Rs 8,300 crore while the offer for sale was worth Rs 10,000 crore.
"When the issue opened, Paytm commanded a GMP of around two percent (Rs 40-50), the lowest compared to most of the recently listed companies," said Aayush Agrawal, Senior Research Analyst-Merchant Banking at Swastika Investmart.
Nikhil Kamath, Co-Founder and CFO of Zerodha, had told CNBC-TV18 he hadn't researched Paytm, but it "wouldn't be right in asking people to avoid this stock."
"Some very smart investors, like SoftBank, have bet to bank on it and they seem optimistic about the future of Paytm, and what it could do and what it could pivot into in a way," he said, advising investors not to buy "just because 100 other people are buying." Kamath said that strategy doesn't work in the long run.