Digital payments giant Paytm (owned by One97 Communications) will be listed on the stock market today at 10 am and stock brokerages are really not expecting much from it. So, word on the street is to refrain from pouring money into the company at this point.
Paytm’s Gray Market Premium (GMP) – a price at which share prices are being traded in the gray market – is discounted by ₹20. This means that gray market traders are willing to buy the shares at ₹2,130, which is about ₹20 less than the issue price of ₹2,150.Gaurav Garg, Head of Research, Capital Via Global Research, told CNBC-TV18 that Paytm had achieved a GMP of Rs 130 on November 8, when the issue was open for subscription.
However, now, several reports have suggested that Paytm shares are priced between ₹15 and ₹30 below the issue price in the gray market.
“This gives a clear indication that the listing is going to be at a discounted rate,” he said. Kranti Bathini, director of equity strategy at Wealthmills Securities, told Business Insider that new investors should not invest in Paytm for the time being, but should wait for another 15 days for the stock to consolidate.
“Serious investors need to wait for a few quarters and not jump into stocks like what happened in Nykaa,” he added.
Nykaa – which made a stellar debut in the stock market last week – crossed the Rs 1 lakh crore market cap on the first day of listing. However, the company’s revenue declined to ₹1.2 crore in the July-September quarter, significantly lower than ₹27 crore reported in the same quarter last year.
Paytm’s IPO was India’s biggest ever public offering and surpassed Coal India’s ₹15,000 crore public offering in October 2010. However, the Vijay Shekhar Sharma-led company has received a relatively low response – it remained undersubscribed till the second half of the last day of the IPO.
Source: Stock exchange
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