Paytm shares are down 26% on initial sales after the largest IPO in India

Shares in the financial services company India Paytm went down by a quarter to its stock market, deducting $ 5bn from its value and ensuring investors had concerns about the group’s activities.

Paytm raised $ 2.5bn in its first public offering, giving them $ 20bn, with its major investors Ant Group and SoftBank selling shares in the company, along with founder Vijay Shekhar Sharma.

The 11-year-old company has sold itself as India-like to Chinese financial institutions such as Ant, with businesses in everything from handicrafts and fun games to gold trading.

But the IPO attracted the interest of investors, with domestic organizations and corporations questioning its profitability and competing skills and Big Tech competition like Google.

Shares in Paytm fell 26 percent to less than Rs1,591 ($ 21.40) on Thursday afternoon.

The IPO is a key figure in the list of lost, value-added startups in India. He shares with them Zomato catering company, the beautiful ecommerce team Nykaa and insurance policymaker PolicyBazaar all rose to their feet.

Paytm’s performance in the coming weeks will be seen as a guide to how investors in public markets have gone to repay their money laundering businesses by promising future assets.

“If it keeps track of its contents it can be a real test for investors to understand the nature of the business,” said Vasudev Jagannath, chief marketing officer at brokerage IIFL Securities.

Paytm was a mobile operator but lost market share to foreign competitors including Google and Flipkart, the Indian ecommerce company Walmart. His most recent innovations in new businesses have not yet paid off.

Paytm operators – with 50m users per month – say the company has a huge opportunity as fintech services grow significantly among Indian consumers, due to rising costs and internet access.

But critics say it has no competitive edge. Brokerage Macquarie Research reported that Paytm had “many fingers on most pies”, giving the shares a 12-month target of Rs1,200.

“A lot of the things Paytm does, every major player in the environment like Amazon, Flipkart, Google and many more are doing,” Macquarie wrote.

Macquarie added that Paytm does not have the necessary licenses to start lending, which is a very lucrative business for fintech companies.

“The right fit is huge. The problem with fintech is that the competition is on the rise,” Jagannath said.

Indian businesses have been performing well among major Asian markets this year, with the Bombay Stock Exchange Sensex index rising by more than 25%. The growth of private equity in India has also continued in China.

But the rise in prices, whose Paytm value 43 times its 2021 sale, has left investors worried that the market is burning.

The head of the Asian financial markets at another Wall Street bank in which he participated said the takeover was “slow” in the construction of the IPO. “There is always a deal that comes when they push the envelope and it doesn’t work,” he said.

Following Paytm, several other companies are expected to sign up in the coming months including the hotel team sponsored by SoftBank Oyo and its shareholding company Ola.