Paytm mega public offer receives only 18% subscription on Day 1

On the first day of the ₹18,300-crore IPO of One97 Communications (that operates Paytm, the digital payments platform) was subscribed only by 18 per cent as it received bids for 88.23 lakh shares against 4.83 crore on offer.

The retail portion of the IPO was subscribed by 78 per cent giving the sellers ₹1,479 crore so far. The portion reserved for non-institutional investors was subscribed 2 per cent and qualified institutional buyers portion by 6 per cent.

The IPO price band has been fixed as ₹2,080-2,150.

The lofty valuation of Paytm has kept investors away from rushing to subscribe to the IPO on the first day like noticed in the past several IPOs. This despite the fact that some of the large brokers have asked their clients to subscribe to the IPO.

Anchor investors

Existing shareholders of Paytm are selling shares worth ₹10,000 crore and the IPO comprises fresh issue of shares worth ₹8,300 crore.

Paytm had informed exchanges that it had allocated 3.83 crore equity shares at ₹2,150 per share on November 3 to a class of investors who included BlackRock Global Funds and Canada Pension Plan Investment Board (CPPIB).

Digital transactions

In FY21, the digital payments market in India was valued at $20 trillion with 43 billion transactions during the year.

Mobile payments, which includes mobile wallet and UPI payment users, are projected to increase from 252 million in FY 2021 to 650-700 million in FY 2026.

Morgan Stanley India Company Private Limited, Goldman Sachs, Axis Capital Limited, ICICI Securities Limited, JP Morgan India Private Limited, Citigroup Global Markets and HDFC Bank Limited are lead managers for the IPO.