Paytm IPO 'mute' subscription: Companies should leave room for listing gain, retail investors must be given discount for good response, says Anil Singhvi

The Paytm IPO closed with an overall subscription of 1.89 times on Wednesday. This was considerably a low subscription given the hype and expectations from the India's biggest ever share-sale.  

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Taking about the tepid response, Zee Business Managing Editor Anil Singhvi said the initial public offering of Paytm’s parent company One97 Communications Ltd deserved this response from investors." It has been history that none of the biggest IPO in terms of issue size have generated wealth for investors. Even Coal India, which though gives dividend and is the second largest IPO so far, has not done much to help people make money," said the Market Guru.  

एक बार फिर अनिल सिंघवी ने उठाई रिटेल निवेशकों के हक की बात#Paytm के कम सब्सक्रिप्शन पर बोले-कंपनियां सस्ती प्राइसिंग पर लाएं IPO, रिटेल निवेशकों को डिस्काउंट भी मिले@NSEIndia @BSEIndia @ashishchauhan @vijayshekhar @Paytm @vikramlimaye @SridharVarun @makingmusic @AnilSinghvi_ pic.twitter.com/y9MzHSP7Jo

— Zee Business (@ZeeBusiness) November 11, 2021

He said everything is good about Paytm but it should not have kept the pricing aggressively. The mute response to the IPO is a lesson for Paytm and all those big and loss-making companies who are planning to float their initial public offer. "They should keep the valuation at attractive levels. It is very important that these companies leave room to make money on listing. It is good from point of view of both that primary market remains healthy and a company's stock performs well in the secondary market," said Anil Singhvi.  

Zee Business Managing Editor said no company would ever want that the stock of their firm is listed below the issue price of an IPO. "I have been always maintaining that price of an IPO should be kept reasonable as neither a promoter nor an investor should regret about floating or putting money in these IPOs. Why can't these companies keep a discount of 5 to 10 per cent for investors as this will give them cushion and encourage them to put money in the stock market," pointed out the Market Guru.  

Singhvi said if big companies, who are planning to launch their IPOs, allow this to happen or Sebi brings out a rule mandating a certain discount for retail investors in bigger companies, this will be beneficial for all stakeholders. "It will ensure that the market remains in good shape, encourage new investors and ultimately help these companies with good response. I personally feel that retail investors should be given an incentive to stay put in the market. The company should ensure something on similar line, and it will be a delight if the capital market regulator comes up with some guidelines on the same," concluded Anil Singhvi.