One97 Communications, the parent company of Paytm, has dropped below Rs 100 in the last two trading sessions, leaving the e-wallet service out of the BSE’s top 100 list. The market capitalisation of the start-up was only Rs 40,863 crore, but the company’s share price has plunged 12 per cent since its listing day. It is now in the 112th spot overall, down from the peak of Rs 1.01 trillion.
While the market has not reacted as expected to this news, the valuation of the firm remains “expensive” according to the latest estimates. The company’s P/S ratio for the period ending 2022-23 was at 26 times the previous year. This is much higher than the global benchmark of 0.3 to 0.5 times. In addition to the inflated valuation, institutional investors have flagged concerns about the growth prospects and intense competition in the Paytm segment.
Although the company raised an IPO last year, the company has never made a profit. It had losses of Rs 1,701 crore in the last financial year. Despite these losses, Mahindra Group’s chairman Anand Mahindra expressed concern for the company and hoped that its debut would cool the IPO listing frenzy. However, he is now worried about the impact of the drop on the Mahindra Group, hence it drops out out top 100 list..
Despite the recent positive business update, the shares of Paytm Payments Bank plunged more than 20 per cent in two trading sessions. This decline is largely attributed to negative news flow regarding the Reserve Bank of India’s decision to block the company from on boarding new customers. The company’s subsidiary, Paytm Payments Bank, processes digital payments for the company. So, the fall in the stock price is a major setback for the company’s stock value.
While Paytm is still valued at Rs 1440 crore, it has fallen more than 20 per cent in two trading sessions, with its stakes in the bank falling by nearly half. The company is a key player in the digital payments market, and it has been growing at a rapid pace in the last few years. Its stock price is now more than Rs 1,400 a share, which is a five-fold rise in one year.
Despite its positive business updates, Paytm has dropped out of the BSE. Its stock was valued at Rs 1440 crore, which is about three times its current value. While this is a huge fall, the company still has a large number of users. The company’s revenue is estimated at Rs 1.4 billion a year. Currently, it has disbursed nearly $1 billion worth of loans.
The stock’s value dropped as a result of a slew of negative news flow. The stock of Paytm Payments Bank slipped more than 20 per cent in two trading sessions, while One97 Communications fell about 4 per cent to close at Rs 875. Despite the company’s positive business updates, Paytm is still struggling to stay in the BSE’s top 100.
In the last few weeks, Paytm’s shares have dropped sharply, hitting a record low of Rs 875. This is despite a number of positive business updates, including an increase in loan disbursals by 401% YoY in October-December quarter. In December 2021, the company has yet to report its financial results, which are expected to be “favorably” rated.
The IPO of One97 Communications Ltd., a fintech company, has raised a record $2.5 billion. However, its shares fell for a second day, wiping $7.75 billion of its market value. The IPO was the worst technology debut in history. This is a massive loss for a startup that IPOed the market once. The IPO price was too high. With a low price, the stock has subsequently been unable to grow.
The company has been hit by a variety of reasons to drop out of top 100 list. The recent public offering of Paytm’s parent company sparked a range of concerns, including its lack of profitability and spread-out business model. The latest IPO, Zomato, Nykaa, and CarTrade Tech have all been hit by pressure in recent days. The last six-day drop in Zomato’s stock has erased almost half of its IPO investors’ money.
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