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HomeMARKETMARKETPaytm shares have rallied over 75 per cent this year

Paytm shares have rallied over 75 per cent this year


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New Delhi: An unwanted record has been pasted in the name of the country’s largest digital payments provider company Paytm. Paytm’s parent company One 97 Communications Ltd. The share price has fallen by more than 75 percent. This is the worst first year performance of any major IPO in the world in the last decade. The company had brought the country’s biggest IPO last year. But since the listing, there has been a steady decline in the shares of the company. This stock has never been able to reach even close to its issue price. This is the worst performance since Spain’s Bankia SA in 2012, according to Bloomberg data. Then the Spanish company’s stock fell by 82 percent in the first year after the IPO.

Paytm raised Rs 18,300 crore, or about $ 2.4 billion, through an IPO last year. Its issue price was Rs 2,150. But since its listing on the stock market on November 18 last year, it has been in a steady decline. Today it closed at Rs 441.05, its lowest level in 52 weeks. Its price has dropped by 30 per cent this month. Investors have lost faith in Paytm and they feel that the company is unlikely to make profits. This is the reason why the shares of the company are falling.

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why the decline

Last week, Japan’s SoftBank Group Corp. sold Paytm shares after the lock-in period was over. Due to this the company’s shares fell heavily. Experts say that the price of tech stocks has declined worldwide. This is because investors have started shying away from loss-making companies. Small investors also participated in Paytm’s IPO, but they were disappointed. The stock of the company could never rise above its issue price.

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BlackRock Inc. in Paytm. And the Canada Pension Plan Investment Board also participated. Experts say that during 2006-08, investors were bullish on construction companies and capital goods companies. 2013-14 was the time of midcap companies. In 2017-19, investors were inclined towards non-banking financial companies while in 2020-22 people were enthusiastic about technology. Some of these companies have good business models. But these businesses are still evolving, so there is not much margin for safety.

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