Looks like the troubles for Paytm are far from over. Ever since it went public in 2021, the company has been in the news for share price which is tumbling down uninterruptedly. Paytm shares hit an all-time low today, marking it the world’s worst first-year share plunge among large IPOs over the last decade.
Thursday morning at 9.30 am, November 24, 2022, the stock price of One97 Communications Ltd. (NSE:PAYTM) was trading at Rs 449.6, and has now reached a record low of Rs 441.
Surprisingly, the current Paytm stock price is over 79% down from its IPO issue price of Rs 2,150.
The below image shared by Bloomberg shows the world’s top five companies with their worst first-year share plunge. Bankia SA, a Spanish financial services company, saw a massive 82% decline in its share price within just a year of its IPO launch. Paytm is close behind with 75% YoY decline in its stock price.
“Investors must wait. The stock will take time to reach the bottom. It can test Rs 350 levels after some consolidation. It is possible to accumulate near these levels in the long term,” said Ravi Singal, CEO of GCL Securities.
Manoj Kumar Dalmia, Founder and Director of Proficient equities Private Ltd, advised investors to avoid buying Paytm stocks as they might drop further to a level of Rs 292.
Paytm share history
According to media reports on November 22, 2022, several prominent investors, such as Japan’s SoftBank and Societe Generale, have sold their holdings in the Vijay Shekhar Sharma-led Paytm since the lock-in period expired. As a result, the company’s stock fell 11.2% to Rs 476.8 apiece. Paytm’s market capitalisation has also tanked from Rs 1.15 lakh crore a year ago to less than Rs 33,000 crore.
In May 2022, Jack Ma led Alibaba Group, which was the largest investor in Paytm Mall, abruptly offloaded its entire stake (43.32%) in the e-commerce company. As a result, Paytm’s valuation drastically fell from Rs 21,000 crores (US$ 3 billion) in 2020 to just INR 100 crore (US$ 13.5 million) in May 2022.
Paytm IPO debacle remained the talk of the town for a very long time last year. Before the debut, many investment advisory firms had warned people about the future prospects of Paytm’s stock due to the absence of the road to profitability. The company made many failed attempts to play down such reports but the impact was unavoidable. Despite listing its stock at a discounted price, the share dropped by 27% by the closing hours of the listing day.
Will the Paytm stock bounce back? Perhaps, it’s a bit early, and difficult as well, to get a convincing answer to it! The next few weeks are going to be crucial and decisive though.