Paytm IPO subscribes 1.9 times in the Indian Market.

Photo by Markus Winkler on Unsplash

As expected, Paytm failed to get huge number of subscription & subscribed 1.9 times.

Digital Wallet Payment Company Paytm IPO is highly priced compared to other recent successful IPOs went through in the Indian market.

Top 7 reasons behind low demand:-

• High Valuation compared to other recent successful IPOs.
• Few other good IPOs for sale at the same time.
• Lack of subscription support in big numbers from HNI(High Net Worth Individuals),FII(Foreign Institutional Investors)& lack of interest among retail investors.
• High offer size of 48.4 million shares.
• Competitive market of digital wallet & payment transfers.
• Short-term investors stayed away from investing in the Paytm IPOs.
• No specific short term gains in sight, even having a broad range of products to offer on Paytm platforms.

Glace at a company’s profile:-

Paytm is owned and operated by one 97 communications ltd & founded in 2000 by Vijay Shekhar Sharma. However, Paytm launched it’s online payment platform in 2010. Paytm counts on over 400 million users in the Indian market, who roughly makes over 25 million transactions daily.

Paytm is backed financially by institutions such as Berkshire Hathaway & Soft Bank’s Vision Fund & Chinese giant- Ant group among others.

Paytm’s portfolio of products:-

• Payment services(Digital Wallet).
• Marketplace online store.
• Insurance products.
• Travel booking services.
• Investment products.
• Digital Gold holding.
• Other financial products

Too many hats at one go:-

As you have vast varieties of products to offer, it gives you authoritative segmentation. But, it’s a long term view. This may be fruitful or may not be, depending on so many factors to consider. One of the reasons, is the competitive segment of each market Paytm operates in. Currently, Paytm is competing with google’s payment services like, Google Pay, Walmart’s Phone Pe & other small digital wallet companies. Recent successful IPO of Policy Bazaar is also an example of segment wise strong & competitive market demand from investors who are looking to invest in a company. Beauty product online seller Nykaa made a blockbuster debut on the opening day and gained almost 100% of issue price.

Considering all the segment targeting options Paytm is having, it needs to concentrate on each segment, keeping growth strategy in mind.

Conclusion:-

Paytm can be a good bet for the long term investors, but for the short term it has very few gains to offer. Paytm has so many segments under its belt. Each segment it has is highly competitive & needs high spending to become a market leader. Concentrating on each segment can be a fruitful & wise decision for the longer term. For the last two years growth was mutant and negative. Keeping in mind cash flow & profit margin, the company has to make some bold steps in the coming quarter. Paytm has been in the Indian market for more than a decade & it is steadily growing. For the long term investors it won’t be an issue.