Why Did Paytm Stock Fall Sharply On The First Day Itself?
India’s leading digital payments system company Paytm made history after successfully launching India’s biggest ever IPO in the current month. As per the sources, the total worth of this public offering was Rs 18,300 Crores with the fixed price band at Rs 2080 to Rs 2,150 for each share. The company hit headlines when the shares of the company made their market debut after much anticipation on Thursday at a 9 per cent discount. Against the expectations, Paytm stock listed at Rs 1,955 dropped 9% from its issue price on the BSE. After some hours, the stock prices declined further and reached Rs 1,564 a share (a drop of 27.25%) & hit the lower circuit limit at the end of the day trade. It has been seen that Paytm’s market capitalization dropped to about $13.6 billion from its IPO valuation of $20 billion. Here comes a question: How did India’s greatest IPO fail to give an outstanding performance? Let’s figure it out. High Valuation Led to Losses for the I...