Shares of Paytm slumped by around 25% after its market debut on Thursday. The Indian mobile payment giant had raised $2.5 billion (€2.2 billion) in the country's biggest ever IPO (initial public offering).
"I hope the Paytm story can inspire entrepreneurs, even for the ones who do not have the background, but I hope this inspires them that they can do it. I believe India is meant for stories like this and many more stories like this to come up," Paytm founder Vijay Shekhar Sharma said at the opening ceremony before trading began at the Bombay Stock Exchange, according to financial daily newspaper Economic Times.
However, within hours of the stock market debut, shares were trading more than 25% below the issue price.
While Paytm is a leader in the competitive world of mobile payment apps, it has made losses for the past three years.
"Paytm has been loss-making and there is no sign to turn profitable in near future," Parth Nyati, founder of Indian trading platform Tradingo, told Reuters.
Other than Paytm, Indian companies have raised a record $10.5 billion (€9.2 billion) through IPOs in 2021 so far, including beauty retailer Nykaa, which listed at an 80% premium last week.
What is Paytm?
Paytm was launched in 2010, and soon became synonymous with digital payments in an economy that was dominated by cash transactions. It has benefited from the current government's demonetization campaign, as well as the pandemic.
Sharma owns 14% stake in the business. Other shareholders include Alibaba group and associate Ant Financial, along with Japan's SoftBank and Warren Buffett's Berkshire Hathaway.
According to Forbes, Sharma, a school teacher's son, has a net worth of $2.4 billion (€2.1 billion). He has said in interviews that he learnt English by listening to rock music.
