![]() ![]() The company captured the imagination of the people by advertising aggressively post-demonetisation as a payment app. The elevator pitch of these stocks is straightforward. Policybazaar sells all kinds of insurance. Nykaa is the Amazon of makeup, beauty and skincare. In the process, it hopes to make some money. Zomato is primarily a platform that brings together restaurants and those who want to order food online. Or, to put it in simpler terms, it is very clear what the business models of these companies are. What this means is that investors bought the stories of the other unicorns, they simply didn’t buy the Paytm story. In fact, the institutional portion of the stock was oversubscribed just 2.8 times. Hence, on the day, when these stocks listed, there was a huge demand for them and their prices went up, leading to listing day gains.Īs already explained, the demand for the Paytm stock among investors was very low. This can be gauged from the fact that the oversubscription in this category in case of Zomato, Nykaa and Policybazaar were 52 times, 91 times and 25 times, respectively. The demand from HNIs was very high for each of these three companies.įurther, institutional investors like mutual funds, insurance companies and other financial institutions wanted to buy these stocks at any cost. Policybazaar was oversubscribed close to 17 times, with the retail portion being oversubscribed more than three times. Nykaa was oversubscribed close to 82 times, with the retail portion being oversubscribed by more than 12 times. The retail portion of the IPO was oversubscribed 7.5 times. So, for every one share on sale, bids were made for 38 shares. The IPO was oversubscribed more than 38 times. Now for the more complicated part, or why Paytm’s story did not catch investors’ fancy as Zomato, Nykaa and Policybazaar did. The stock price fell.Īlso read: Muted debut for Paytm on D-street So, those who were looking to sell out their IPO allocation on listing day didn’t find buyers. In Paytm’s case, the retail portion was barely oversubscribed, but worse, the HNIs hardly bought the stock at all. The demand for the stock pushes up its price and those selling it make money. A stock’s price goes up on listing day if it is massively oversubscribed and investors who did not get any allocation in the IPO are looking to buy it. Many retail investors and HNIs look to sell out on a stock’s listing day and make some money. ![]() This means that for every 100 shares on offer, these investors bid for only 24 shares. This means, for every 100 shares on offer, investors bid for 166 shares.įor non-institutional investors, which primarily includes high net-worth individuals (HNIs), or essentially individuals who bid for shares worth more than Rs 2 lakh in an IPO, the issue was subscribed just 0.24 times. When it comes to retail investors or investors who had bid for shares up to Rs 2 lakh, the oversubscription was 1.66 times. Paytm’s IPO was oversubscribed 1.89 times. Why did this happen? There is a simple answer and a complicated answer. What this means is that investors who were allotted shares in the IPO and were still holding on to them as of Thursday had already seen the value of their investment fall by more than a quarter. On Thursday, when the stock was listed, its price fell and closed the day at Rs 1,564.2, or 27 per cent down from its allocation price. The investors who invested in Paytm’s IPO were allotted shares at a price of Rs 2,150 per share. Yet, unlike the IPOs of other unicorns - start-ups that are valued at more than a billion dollars - investors somehow didn’t buy Paytm’s story. ![]() Paytm’s initial public offering is the biggest IPO that the country has ever seen. ![]()
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