(Bloomberg) — Shares of India’s Paytm rose for a second day on Wednesday, easing a selloff that wiped out about a third of the digital payments startup’s value in its first two trading sessions.
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The payments firm climbed as much as 10.3% on Wednesday, but is still down more than 20% from its offer price. Paytm’s parent company, One 97 Communications Ltd., raised $2.5 billion in India’s biggest-ever IPO that had global institutions such as BlackRock Inc. and Canada Pension Plan Investment Board as cornerstone investors. Shares sank 27% last Thursday, marking one of the worst debuts by a major technology company globally.
Paytm’s poor start came after some critics had already questioned its valuation at the time of the initial public offering’s pricing. That now means at least a dozen Indian firms working on IPOs are under extra investor scrutiny, and planned smaller ones could have a harder time pricing shares if there is a reduced appetite for new listings.
What Bloomberg Intelligence is saying:
“Paytm is facing skepticism about its IPO, similar to the initial resistance that Facebook dealt with when it listed,” BI strategists Gaurav Patankar and Nitin Chanduka write in a note. “The public listings of ‘new economy’ startups such as Paytm and Zomato’s MSCI inclusion bolster India’s evolving digital landscape and are part of the $375 billion opportunity that we see in the country.”
Sentiment in the secondary market is turning around after the benchmark S&P BSE Sensex lost 5% from its record touched in October. It was up as much as 0.4% on Wednesday.
(Updates share moves)
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