Paytm shares dip nearly 13% on anchor investors' lock-in expiry day

The shares of recently listed Paytm declined nearly 13 per cent on anchor investor's expiry day in the early trade on the BSE on Wednesday. Shares of Paytm touched day's low of Rs 1297.70 and was trading with some recovery at Rs 1350.00, down Rs 145.45 or 9.73% around 10.15 am.

After receiving lukewarm response on listing, the shares traded lower and saw correction of 31% on its listing price to Rs 1350 per share on November 15.

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Shares of Paytm touched a 52-week low of Rs 1,271.25 on the BSE on November 21.

Market expert is of the view that Paytm has been seeing buying interest, but until the street determines its right valuation, there will be volatility.  

"Following a sharp decline after the lock-in period ended for anchor investors, Paytm is finding buying interest at lower levels, however, Rs 1700 may act as a supply point and it may remain in the Rs1300-1700 range, until the market determines its right value. If it manages to sustain above Rs 1700 level, it may see further buying interest while it might find strong support between 1200-1300 range," said Parth Nyati, Founder, Tradingo.  

He said Paytm's greatest strength is its huge customer base and strong brand positioning, however, low entry barrier businesses lack a clear moat. "Paytm will use its strengths to enter new businesses or to create moats. If Paytm manages to emerge as a leader in a particular business, then it will be possible to expect buying interest at lower levels, otherwise it may take many years to reach its peak valuation," he added. 

As many as 3.83 crore share were subscribed at the rate of Rs 2150 per share, while anchor investors were allotted 5.9 per cent shares of the total outstanding shares worth Rs 8235 crore on November 15, as per Zee Business TV report.  

As far as anchor investors are concerned, Canada Pension Plan holds 11.4% shares, Blackrock has 10.5% shares and the Government of Singapore was allotted 5.3% outstanding shares on November 15.  

Paytm shares crashed more than 27% in India`s largest public offering last month. Since the listing on November 22, the stock has logged losses for 13 of the 18 sessions.

Paytm, which counts SoftBank and Ant Group among its backers, had raised $2.5 billion in its IPO, of which $1.1 billion was from institutional investors.

FSN Ecommerce Ventures, FINO Payments Bank, SJS Enterprises, PB Fintech, Sigachi Industries, One 97 Communications, Sapphire Foods, Latent View Analytics, Tarsons Products and Go Fashion are 10 stocks whose anchor lock-in restrictions are lifting in December.  

Who is an anchor investor?   
As per Ministry of Corporate Affairs, a Qualified Institutional Buyer (QIB) is an anchor investor who make an application of a value of at least Rs 10 crore in a public issue. There shall be a lock-in of 30 days on the shares allotted to the Anchor Investor from the date of allotment in the public issue.