![]() ![]() (BABA) own more than 30% of Paytm, according to recent filings, and that investment has become problematic since border clashes in 2020 soured relations between India and China and led New Delhi to ban dozens of Chinese apps. To complicate matters further, China’s Ant Group and Alibaba “We believe RBI’s direction will not materially impact Paytm’s overall business,” a company spokesperson said in a statement.īut the damage had been done. Paytm stock plunged further after the RBI’s notice, even though the company tried to reassure existing customers by informing them that they can continue using that bank’s services “ without interruption.”Ī Paytm logo can be seen in Kolkata, India, in November 2021. The RBI said it would allow Paytm’s Payments Bank to add new customers “after reviewing report of the IT auditors.” It can accept deposits and issue debit cards but cannot lend money to customers. Paytm launched its Payments Bank in 2017 as a joint venture with Sharma. The Reserve Bank of India (RBI) also directed the bank to “appoint an IT audit firm to conduct a comprehensive System Audit of its IT system.” While the stock has trended lower for most part since its listing, March has been particularly difficult for the payments company.Įarlier this month, India’s central bank barred the company’s banking arm from signing up new customers. India’s tech IPO party - which started with Zomato last year - came to a screeching halt with Paytm’s debut. “Other investors who got on the bus after the IPO may be repenting now,” he added. “But those retail investors were looking for immediate listing day gains.” “Last year, there was an IPO frenzy and people were willing to pay the aggressive valuations these companies demanded,” said Piyush Nagda, head of investment products at Mumbai-based brokerage Prabhudas Lilladher. The steep plunge in those stocks has also likely thwarted IPO plans for other Indian companies - at least for the foreseeable future. Instead, it has turned into a big, fat reality check for tech companies, with retail investors questioning their huge valuations. ![]() While technology stocks are suffering globally, the plunge in India is particularly painful for investors and companies who were hoping for a coming-of-age period for one of Asia’s fastest-growing startup ecosystems. Online insurance marketplace Policybazaar has fallen more than 40% since it began trading in November. While Paytm has been a flop since day one, other Indian tech giants whose debuts were red-hot in comparison have also plunged in recent months.įood delivery company Zomato - the first Indian unicorn to go public - is down over 36% from its first day of trading last July.Į-commerce site Nykaa, whose debut late last year made its founder India’s wealthiest self-made female billionaire, is also trading 36% below the highs it saw on listing day. It is not the only Indian internet company that has soured on the stock market this year. The firm’s stock is now trading close to 560 rupees ($8), more than 70% below its offer price, according to data from Refinitiv. Investors, however, appear to disagree - Paytm’s stock crashed 27% on its first day of trading.įour months later, things have only gotten worse. Offering will include a mix of new and existing shares to meet regulatory obligations in India, which requires 10% of shares to float within two years and 25% within five years.Paytm founder Vijay Shekhar Sharma breaks down while giving a speech during his company's IPO listing ceremony at the Bombay Stock Exchange in Mumbai on November 18, 2021.The start-up, backed by investors including Berkshire Hathaway (NYSE: BRK.A) (NYSE: BRK.B), SoftBank Group ( OTCPK:SFTBY) and Ant Group (NYSE: BABA) is targeting a valuation of around $25B-30B. ![]() ![]() Employees can participate in the IPO by consenting to offer all or part of their equity shares and shares not sold during the offering would be locked-in for a one-year period, Amit Khera, One97’s secretary, said in the notice to employees and shareholders.Sources said, the board has approved the offering plans in principle and is finalizing the draft red herring prospectus, to be filed in the first week of July.India's biggest digital payments brand, Paytm is in talks with its employees whether they want to sell shares in the digital payments pioneer’s planned initial public offering - Bloomberg.Photo by Naturecreator/iStock Editorial via Getty Images ![]()
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