Explained: Why have Paytm share prices crashed?

Monday, March 14, 2022
author picture Lina Fontaine
Video/image source : youtube, imagesind
Original content created by news.limited staff

The IPO of Paytm has been the subject of a lot of attention lately. While the company raised more than Rs 14‚000 crore in its IPO‚ the stock price has plunged by more than 50%. While the company has no immediate plans to raise more money‚ many market participants are blaming the IPO's high valuation for the sudden drop. In fact‚ some institutional investors are also voicing concerns about the company's prospects for growth. The company's IPO coincided with the fifth anniversary of Prime Minister Narendra Modi banning two of the biggest currency notes in India. The ban was a massive disruptor to the Indian economy and resulted in the IPO. After the IPO‚ Paytm had signed up ten million new users within a month. Its IPO has become a household name in India. The plunge has hit the valuation of the company. Its share price has dropped over seventy percent compared to its issue price of Rs 2‚150. In addition to the company's low valuation‚ the IPO has cast a cloud over the company's future. Investors are hesitant to make big bets on new-age companies based on this news. And so‚ the stock's recent slump has made investors cautious about the company's future.