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market | IST

Paytm IPO pricing 'absolutely off'; fall 'category killing': BharatPe MD

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Speaking in an interview with CNBC-TV18, the BharatPe CEO, Ashneer Grover, said that it was sad to see the recent developments with the Paytm IPO and it is a cumulative failure of the management and the bankers.

The Paytm slide post listing on Dalal Street is not good news for the category as a whole, according to Ashneer Grover, co-founder and MD of BharatPe.
Paytm's parent company One97 Communications' shares continued to tumble on Monday following a weak listing last week. The stock tanked 27 percent on the day of its debut and is trading at Rs 1276 per share, down 17 percent today at the time of publishing.
Speaking in an interview with CNBC-TV18, the BharatPe MD said that it was sad to see the recent developments with the Paytm IPO as the steep fall has a wider implication on the sector and is "category killing".
“I think the company simply seems to have not looked at where the market is, and just gone ahead and priced itself where it wanted to. So it is a cumulative failure of the management, and the bankers. You know, 40 percent, down on a $20 billion stock, which is supposed to be the poster child of the Indian startup – it is category killing,” said Grover.
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Grover argued that the largest UPI player in the market is PhonePe and it is currently valued at $9 billion approximately. However, the Vijay Shekhar Sharma-led Paytm hit the market seeking a valuation of $20 billion.
"The largest UPI player PhonePe is valued at $9 billion. If Phonepe is valued at $9 billion, how can PayTm demand a $20 billion valuation?" he questioned.
The BharatPe MD further said that Paytm is seeing brand erosion and not just price erosion with this fall.
Another implication of the Paytm listing, according to Grover, will be that companies looking to list over the next 2-3 months will see a 'Paytm discount'.
"I expect IPO valuations to come down post Paytm listing. I don't expect public market to honour the kind of premium seen in private markets," he explained.
He further warned that investors won't take OFS (offer for sale) issues too kindly post Paytm listing.
(For the full interview, watch the video)