Paytm is inching closer to Macquarie's target of ₹1200

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Paytm is inching closer to Macquarie's target of ₹1200
Paytm/ BCCL
  • Shares of One 97 Communications have dropped another to ₹1298 at 12:13 p.m.
  • The company is currently sitting on a market cap of $11.2 billion, a significant drop from the $19.9 billion valuation of the issue.
  • Zomato, which was valued at $5.8 billion in the private market in February 2021, is now valued at $16.4 billion in the public market.
The public listing of One 97 Communications — the parent company of digital payments giant Paytm — has eroded $10 billion from the company’s valuation in the first two days of its debut on the stock market.

The shares of Paytm were trading at ₹1298 at 12:13 p.m. on November 22, representing a drop of 17%. The company is currently sitting on a market cap of ₹84,032 crore ($11.2 billion).

Notably, global investment bank Macquarie had set the target price for Paytm at ₹1,200, which is 44% below the issue price of ₹2,150 .

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Vijay Shekhar Sharma, commenting on the same report, told CNBC TV18, “somebody who has not met us and has an opinion on us, is not my opinion to keep an opinion on that. I don’t comment on opinions, I comment on facts.”

"We are a wholesome meal ‘Thalli’ (platter) with different varieties, while Macquarie is looking for a business model of pizza," he told ZeeBusiness.

Shares of One 97 Communications — the parent company of digital payments giant Paytm — have dropped another 4.69% on November 22, trading at ₹1,490 at 9:34 a.m.

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The company is currently sitting on a market cap of ₹96,330 crore ($12.9 billion). The company’s shares had tanked 27% on the first day of listing on November 18. The company’s market cap dropped by nearly $7 billion on the first day of listing itself.


TimelineValuation
Valuation in private market$16 billion
Valuation at issue price of ₹2,150 $19.9 billion
Day 1 of listing$13.3 billion
Day 2* of listing$12.7 billion
Source: Company, Stock Exchange
*The data will be updated once the market closes at 3:30 p.m.

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Food delivery firm Zomato, which was valued at $5.8 billion in the private market in February 2021, is now valued at $16.4 billion in the public market.

Several industry experts — including Manoj Dalmia of Proficient Equities, Scenes by Avalon’s Shashank Udupa, TaxationHelp.in’s Neha Nagar — have pinned Paytm’s expensive valuation, lack of a focused business model, limited promoters in India and analysts ratings as some of the factors behind the company’s bad performance in stock market on day one.

You can read more on why the market is not excited about Vijay Shekhar Sharma’s vision of a superapp here.

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Sharma-led Paytm shared a list of business updates from October 2021, on Sunday night. It seems to have not made much of a difference for retail investors.

MetricsOctober 2020October 2021
Gross Merchandise Value (GMV)₹36,000 crore₹83,200 crore
Monthly Transacting Users (MTU)4.7 crore6.3 crore
Total Devices Deployed (Point-of-Sales and Soundbox)400,0001,400,000
Number of loans disbursed through Paytm0.2 million1.3 million
Value of loan disbursed through Paytm120 crore627 crore
Source: Paytm

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