Paytm IPO subscribed 17%, retail portion sees 73% bidding so far on Day 1 - what experts say?

The initial public offer (IPO) of One 97 Communications Ltd (Paytm) was subscribed 17% on the first day of the opening around 4.10 pm. The three-day IPO that will close on Wednesday, November 10, 2021, saw maximum participation from retail investors as Retail Individual Investors (RIIs) booked the offer 0.73 times with bidding for 64,03,458 shares as against reserved quota of 87,98,076 shares around the same time. 

Non-Institutional Investors (NIIs), Qualified Institutional Buyers (QIBs) subscribe the issue 0.1%.  

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The company has set a price band of Rs 2,080-2,150 per share for this IPO.  With issue size of Rs 18,300-crore, the Paytm IPO, if successful, will be the biggest in the country after the Coal India IPO in 2010, wherein the state-owned company had garnered Rs 15,200 crore. 

The offer comprises fresh issuance of equity shares worth Rs 8,300 crore and Rs 10,000 crore from an offer for sale (OFS) by existing shareholders.  Earlier, on Wednesday, 3rd November, Paytm raised Rs 8,235 crore from anchor investors. 

Should You subscribe? Check what experts say 

Zee Business Managing Editor Anil Singhvi: Subscribe 

"Only high-risk taking investors can apply for long term," said Zee Business Managing Editor Anil Singhvi, adding that strong brand and promoters work for this company. Besides, good track record and a market leader in its segment and diversification into new areas are other positives for this company, he mentioned.  

Jyoti Roy, DVP, Equity Strategist, Angel One Ltd: Subscribe 

At the upper end of the price band, Paytm is valued at 49.7x its FY21 revenues. While valuations may appear to be expensive, Paytm has become synonymous with digital payments through mobile and is the market leader in the mobile payment space. Patym is well positioned to benefit from the exponential 5x growth in mobile payments between FY2021 – FY2026, and hence believe that the valuations are justified. We recommend investors to SUBSCRIBE to the issue," said Jyoti Roy, DVP, Equity Strategist, Angel One Ltd. 

Arihant Capital: Subscribe 

Monetizing the large installed customer/merchant base of Paytm for broader financial service offerings, such as credit, wealth, and insurance will is the key opportunity for the company and it would lead to the profitability going forward, said Arihant Capital. "The valuation of the company is on the higher side. Thus, we recommend investors' to “subscribe this issue for listing gain”, it said in a note. 

One 97 Communications Ltd (Paytm) Company details  

Incorporated in 2000, One 97 Communications Ltd is India's leading digital ecosystem for consumers as well as merchants. In 2009, the company launched the first digital mobile payment platform, "Paytm App" to offer cashless payment services to customers and now, it became the India's largest payment platform and the most valuable payments brand.  

It offers payment services, commerce and cloud services and financial services to 337 million registered consumers and over 21.8 million registered merchants, as of June 30, 2021.  

Its software and cloud services allow large, medium and small merchants to improve their business operations and access important financial tools such as banking, wealth and credit facilities.