Shares of One97 Communications, parent company of Paytm, fell more than 7% after rising for three consecutive trading sessions. Overall weakness in the broader market also weighed on Paytm shares. Nifty50 and Sensex both fell almost 2% today.
At 9:36 am, the stock was down more than 3% to Rs 1,740.5 on BSE, a far cry from the issue price of Rs 2,150. During this week, the stock rose by more than 11%.
Paytm’s IPO suffered from exorbitant valuations, several analysts said.
One97 Communications is a big cash consumer and achieving scale with profitability is a big challenge, the foreign brokerage warned.
Some market participants believe new age tech companies are the future and their stocks are worth buying, but not at foamy valuations.
Meanwhile, a news report reported that several large investors added Paytm shares to their holdings after the shares plunged 41%.
BlackRock Inc. and the Canada Pension Plan Investment Board were among the so-called IPO flagship investors who bought more Paytm shares on Tuesday and Wednesday, the report added.