Paytm, the biggest IPO ever launched in the country, got 48 percent subscription on the second day. Out of 4.83 crore shares issued under this issue, bids have been received for only 2.30 crore shares so far. The portion reserved for retail investors has been subscribed 1.20 times. While the portion reserved for NIIs is subscribed only 4 per cent. Bidding took place for only 1.18 crore shares against 2.63 crore shares reserved for QIBs (Qualified Institutional Buyers). Only 45 percent of the share reserved for him was subscribed.Analysts believe that FDI will also come in Paytm.
What should investors do?
Analysts believe that despite being the first major player in digital payments, Paytm has a very strong competitor. Especially it is getting strong competition from Google Pay. Although Paytm can get the advantage of being in the business of insurance, broking. These businesses can give Paytm an edge, but at the moment its valuation is very high. Pavitra Shetty, co-founder and trainer of Tips2Trades, says that investors should book profit on the listing and exit. Then enter when it declines. Investors should wait for 15 to 20 per cent fall after listing . After that you should invest in it.
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How strong is Paytm’s IPO?
Vikas Jain, Senior Research Analyst, Reliance Securities recommends investing in Paytm for the long term. According to him, this IPE is based on price to sale. Valued at 43.7x FY21, it is also valued at 36.7x FY22. It is available at 12 per cent discount from the recently launched Zomato IPO. Jain believes that the high valuation of unicorns like Paytm reflects its scale and brand equity. Similarly, 33 percent growth in GMV has improved its chances. This growth has been achieved between 2019-21 despite Corona. Its digital payment value has also increased by 17 percent. In such a situation, it can prove to be a good stock for the long term.
(Article: Surabi Jain)
(The stock recommendations given in the story are those of the respective research analyst and brokerage firm. Financial Express Online takes no responsibility for the same. Investments in capital markets are subject to risks. Please consult your advisor before investing.)
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