Paytm shares dropped by about 40% from the IPO price on the second trading day

Shares in the recently named Paytm financial company came down for the second day as traders and banks criticized one of the worst offenders in the Indian market for wanting to raise more prices.

Paytm payments, backed by Japan’s SoftBank, China’s Ant Group, and Alibaba, fell 27% following a report last Thursday and down 13% on Monday after Friday’s market holiday.

This reduced Paytm by 37 per cent on its IPO prices and removed almost $ 8bn from the stock market in just two days of trading, while the chief financial officer said the decline was “unexpected”.

Paytm raised $ 2.5bn from the IPO, invested about $ 20bn and set up a large payday loan for their sponsors. But banks and businesses familiar with the deal said Paytm’s compulsion to list, the persistence of high-value depositors, the weak domestic demand and strict Indian law dividing into various business groups came together to signal a devastating collapse.

“Obviously the way the goods worked. . . it was unexpected, “said Paytm’s chief financial officer Madhur Deora at FT.

Proponents of her case have been working to make the actual transcript of this statement available online.

“This is a true reflection of how the book was distributed and who was in the book,” said the head of the Asian market at Wall Street Investment bank, adding that the agreement has shown many signs of “pushing the envelope at. Price.”

A person close to the company said that its growth was based on the needs of businesses and banks, as well as the need to reduce its investment costs, including Ant, which sold its share after being hit by Indian routes to China. money last year.

The head of India’s largest markets at another Wall Street bank said many long-time buyers took part as anchors, who were not allowed to sell what they had for 30 days and who received more shares from the division, which should be. give 45 percent of the shares sold.

They have never been to the majority of investors, accounting for 30 percent of the contract. This has led some investors, who expect only a small portion of their senior orders to be filled to receive more shares than expected.

The bank’s treasurer said “it has been” a great deal “for the authors of Morgan Stanley, Goldman Sachs, JPMorgan and Citi to achieve a significant portion of the book and that hedge funds” have achieved more than they wanted “.

This increased share of corporate investors was increased by a 10 per cent increase in sales due to the lack of Paytm profits, a total shortage of funds for Indian companies and the weaker needs of the wealthy, who were given 15 per cent of the shares sold. .

“All the boys [institutional investors] they have very crowded shares and a lot of them are going to market [through selling], ”Said the banker.