Sourabh Pol – 20202225

Rohan Srivastava – 20202226

Swati Jethani – M20202704
Naihal Purohit – 20202220
Charvi Goyal - 20202215
Paytm, India’s biggest IPO with a size of Rs 18,300 crore, got listed on the bourses at 9 per
cent discount to its offer price and the share touched the lower circuit on its market debut day.
It closed at a price of Rs 1,560, 27.40 per cent below the offer price.
Objective of issue
 Growing and strengthening Paytm ecosystem, including through acquisition and retention
of consumers and merchants and providing them with greater access to technology and
financial services - ₹ 4,300 Crores
 Investing in new business initiatives, acquisitions and strategic partnerships - ₹ 2,000
Crores
 General corporate purposes
IPO Opening Date Nov 8, 2021
Amount (Cut-
IPO Closing Date Nov 10, 2021 Application Lots Shares
off)
Issue Type Book Built Issue IPO
Face Value ₹1 per equity share
Minimum 1 6 ₹12,900
₹2080 to ₹2150 per equity
IPO Price
share Maximum 15 90 ₹193,500
Market Lot 6 Shares
Min Order Quantity 6 Shares
Listing At BSE, NSE
Category Subscription (times)
Eq Shares of ₹1
Issue Size (aggregating up to QIB 2.79
₹18,300.00 Cr)
NII 0.24
Eq Shares of ₹1
Fresh Issue (aggregating up to Retail 1.66
₹8,300.00 Cr)
Total 1.89
Eq Shares of ₹1
Offer for Sale (aggregating up to
₹10,000.00 Cr
 Why Paytm IPO Failed
Overhyped Valuation
• Siji Philip, senior research analyst, Axis Securities, a broking firm, says, “Globally, profit-making
payment companies are trading at median nine-times of future earnings, whereas One97
Communication, a loss-making company, is valued at 49.7-times its FY21 revenues.”
• The Macquarie report says that Paytm’s valuation, at around 26-times FY23 estimated price-to-sales, is
expensive especially when profitability remains elusive for a long time. Most fintech players globally
trade around 0.3-0.5-times price-to-sales, adds the report.

Manipulated Guidance
• Investment banks including Goldman Sachs Group Inc. which is working on Paytm's IPO-have been
bolstering their teams in the country and are benefiting from the spate of deals and the flurry of fund
raising. Investors has to wait for a long time for them to make profit as big people are entering the field
and prices are expensively priced, it has been termed a “Cash Guzzler” and has raised doubt on its scale
and profitability.
 Over-Priced Listing
• As per the investors after India’s largest IPO up to date. Paytm’s Rs 18,300-crore public issue got a decent
1.89 times subscription, but grey market premium has vanished since then, amid concerns of overvaluation.
At about 45x sales, and a market capitalization of Rs 1.4 lakh crore, Paytm stock is not cheap
• The IPO was issued for Rs. 2,150 per share which was much higher than the actual valuation of the company
leading to losses. One97 Communication, the parent company of Paytm, traded at 49.7 times its FY21
revenue. This was when the company wasn’t even recording any profit
• Also considering Paytm's heavily cash-burning business model, no clear path to profitability, large regulatory
risks to the business and questionable corporate governance

Bad Market Timing

• Vijay Shekhar Sharma blamed bad timing for a tepid response to Paytm NSE -3.30 %’s initial public offering
• Highly Volatile Stock Market Condition
 Increasing Competition
The biggest threat for the company is PhonePe which constitutes 42% of overall UPI transactions of the
country. It is followed by other big names such as Google Pay and BHIM. PhonePe and Google Pay together
constitute more than 82% of the UPI market of India which has a lot to say about Paytm’s future in this
segment.
Questionable future
One of the major reason behind distrust is the absence of license to enter the lending business

Exit Strategy
Berkshire Hathaway, which invested $300 million in Paytm in 2018 for a nearly3% holding could see the
value of its stake rise about 70% at a $20 billion valuation, while Paytm's other international backers also
made huge profits.
 Reference
• https://www.dkoding.in/business/companies/top-5-reasons-behind-massive-failure-of-paytm-ipo/amp/
•https://www.business-standard.com/article/companies/paytm-bleeds-as-macquarie-s-second-report-puts-rs-1-200-as-t
arget-price-121112200404_1.html
•https://www.google.com/amp/s/m.timesofindia.com/business/india-business/paytms-listing-failure-what-it-means-for
-future-ipos/amp_articleshow/87861202.cms
• https://www.outlookindia.com/website/story/
business-news-why-did-paytm-fail-to-impress-investors-on-market-debut-day/401490
• https://www.google.com/url?sa=t&source=web&rct=j&url=https://m.timesofindia.com/business/india-business/
paytms-listing-failure-what-it-means-for-future-ipos/amp_articleshow/
87861202.cms&ved=2ahUKEwji_Luk_Kn1AhXNzTgGHVf7DmEQFnoECAQQBQ&usg=AOvVaw1Zn6hTvkyTS-f5R4WUZ_PE
• Paytm: Vijay Shekhar Sharma blames bad timing for Paytm's flop listing - The Economic Times (indiatimes.com)
• https://www.moneycontrol.com/