Paytm update : Shares of Paytm rose for a second day on Wednesday, easing a selloff that wiped out about a third of the digital payments startup’s value in its first two trading sessions. The digital payments firm’s stock climbed as much as 11% at ₹1,673 per share in early deals, but is still down more than 20% from its offer price.
“The rebound in Paytm seems to be lower level buying. Also, the company is going to hold it’s first board meeting on 27th November so investors are expecting some positive announcement by the management. Paytm may touch 1800 levels in due course,” said Ravi Singh, Head of Research & Vice President, ShareIndia.
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Paytm shares had sunk 27% last Thursday, marking one of the worst debuts by a major technology company globally. The stock had slumped for two straight sessions post listing. Paytm’s poor start came after some critics had already questioned its valuation at the time of the initial public offering’s (IPO) pricing.
“Paytm is finding buying interest at lower levels following a sharp fall after listing however 1700 could act as a supply point and it may remain in the 1400-1700 band until the market identifies its right value while if it manages to sustain above 1700 level then it may see further buying interest,” said Santosh Meena, Head of Research, Swastika Investmart.
The market will watch how Paytm will use its strengths to enter into new businesses or create a moat and if it manages to emerge as a leader in a particular business then we can expect buying interest from lower levels otherwise it may take many years to reach its peak valuations, added Meena.
The three-day IPO of Paytm’s parent One97 Communications was launched on November 1 that concluded on November 3 with a price band of ₹2,080-2,150 per share.
The country’s biggest IPO was subscribed 1.89 times with institutional buyers including FIIs flooding the share sale with offers seeking 2.79 times the number of shares reserved for them. Paytm IPO was greater than miner Coal India’s ₹15,000 crore offer a decade ago.