New Delhi: The loss of Paytm listing has raised concerns among investors and entrepreneurs. He fears it could derail a string of expected Indian floatations, which were supposed to cement the country’s position as a major destination for tech start-ups after the US and China. This was stated by the Financial Times.
The debacle has focused the bookrunners on IPOs including Paytm, its shareholders SoftBank, Alibaba, Goldman Sachs, Morgan Stanley and Citigroup.
India’s head of equity capital markets at a western bank said, the concern for all of us is whether this affects the technical sentiment of broader India.
Evaluation is going to be very difficult.
Indian fintech company MobiKwik has delayed its IPO originally scheduled for November, saying it will list in due course, the report said.
Ashneer Grover, co-founder of Fintech BharatPe, said that Paytm has spoiled the Indian market.
According to a Financial Times report, Sandeep Murthy, partner at investment group Lightbox in Mumbai, said there may be some period of cooling off in fintech listings by early next year, but argued that it was natural.
Indian tech companies have raised a record $5 billion through listings this year, which is almost 10 times more than last year.
Prashant Gokhale, co-founder of Hong Kong-based research group Althea Capital, said Paytm’s core business is not to make money and the move to cut marketing spend indicates that it is a better form of publicity with SoftBank and Warren Buffett prior to listing. Trying to show the bottom line.
A person with direct knowledge of Paytm’s IPO pricing said there were deals chasing a lot of liquidity, especially with actions in China making India more attractive as a destination.
“Investors are desperate to leave, as prices were raised without improving fundamentals,” the report said. The one who didn’t get a lot of money chasing that deal is probably happy now.
Paytm’s large Chinese ownership also poses a regulatory and reputational risk after India imposed tough restrictions on Chinese investments following military tensions last year.
Alibaba and its financial arm Ant sold shares in the IPO, while they still own about a third of the company, reports the Financial Times.
The least encouraging thing to me was that the market was not in a state of irrational enthusiasm, Lightbox’s Murthy said of the company’s launch.
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