New Delhi, Nov 18 (EFE).- Indian company Paytm, which runs one of the most popular mobile applications for digital payment in the country, debuted on the stock market on Thursday to a tepid response, losing almost one-fourth of its issue price, even as experts have expressed doubts over its business model.
The company, listed in the stock market by its official name One97 Communications, on Nov. 10 secured the largest IPO in the country’s history, worth around $2.5 billion.
Although the issue price of the shares was fixed at 2,150 rupees ($28.94), around 4 pm on Thursday, the first day of trading, Paytm’s stock price had plummeted to 1,564 rupees.
However, local broadcasters aired footage of Paytm founder Vijay Shekhar Sharma striking a happy pose during an event at the Bombay Stock Exchange, as he downplayed the fall in the company’s share price.
Some experts have raised doubts on the future of the company, which is backed by the Ant Group – the technofinance arm of Alibaba – as well as Japanese tech giant Softbank.
“Paytm saw a weak listing on account of expensive valuations and continuous loss in past years. In upcoming quarters the company is expected to post loss as its strategy is to grow consumer base, merchant base, advance technology platform and rapidly scale up for other segments,” said Akhil Rati, an analyst at Marwadi Shares and Finance.
According to Forbes, Sharma went from earning a few thousand rupees a month to boasting a net worth of around $2.4 billion.
The engineer, son of an Indian professor, founded Paytm in 2009 as a platform to pay telephone bills, which later started allowing digital payments and grew into an electronic wallet.
The company has sought to expand its business model and create a platform that also allows the purchase of gold, airplane tickets and enables sending money to individuals within and outside the app.
The surprise withdrawal of major currency notes by Indian authorities in 2016 led to a massive spike in digital payments, which had been out of reach for most people at the time, and resulted in a boost for e-payment platforms such as Paytm. EFE