(FT) Shares of India’s biggest IPO Paytm fell about 26% on Thursday after market debut, with investors less upbeat about the company’s path to profitability.
Investors raised concerns about Paytm’s business model and its ability to rival big tech giants like Google leading to a mixed interest in the IPO.
Despite being an early entrant in mobile payments, Paytm has lost its market share to rivals such as Google and Flipkart while its new business forays are still in the loss zone.
Paytm enthusiasts are optimistic the company will grow in the tech space as more Indian customers join the already 50 million active monthly users.
Critics, including brokerage Macquarie Research, say Paytm has a little competitive edge, with most areas of its operation already covered by major players such as Amazon and Google. The research firm says Paytm does not have the necessary licenses to begin lending in the competitive space.
Paytm’s plunge on debut means that it has wiped out $5 billion in value. The company raised $2.5 billion in the IPO to take the total valuation to $20 billion.
PAYTM: NSE is currently closed for trading.
