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There is still erosion in Paytm, what should those who have their share do now?

MUMBAI: The time has come for investors to cry over the country’s biggest IPO Paytm. After a 25 per cent fall in the share price on the day of listing, the decline continued for the second day on Monday. At 12.00 in the morning, the stock of Paytm was trading 16 percent down from the previous close. That is, in just two days, it is the turn of those who invest in these stocks that they have to bear a loss of 39 percent. The bigger concern is, at what level will this stock turn rock bottom?

According to analysts, no one can say when Paytm will start making profits. At the same time, instability is also being seen in his senior team. At present, there is no possibility of buying shares of some domestic institutions. This clearly means that there is no possibility of improvement in this stock in the short term.

Paytm had offered shares in the IPO at a price of Rs 2,150. Although its listing on Thursday was Rs. 1950, and closed at Rs 1564 at the close of the stock market. The stock was trading at Rs 1306 today at 12.00 am. Experts were already questioning the valuation of Paytm’s shares. That’s because the stock’s valuation was too high compared to the company’s earnings. The valuation of Paytm was 20 billion, which is more than some bluechip companies in the country.

According to Piyush Nagda, Head of Investment Products, Prabhudas Lilladher, Paytm shares will continue to sell in the short term. Those who have seen shares in IPO will try to exit from it at every turn. But new investors will avoid buying it. He said it is difficult to ascertain the fair value of the loss-making company’s stock, but there is a possibility of a slight rise at the level of Rs 1,250-1,300.

In a report released by Macquarie on the day of Paytm’s listing, the stock was valued at Rs 1,200. In a note, the brokerage firm said that Paytm is a cash burning machine, and there is no clear approach to access profits. If Paytm doesn’t start lending money then it can’t earn enough revenue just as a distributor.

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