Paytm shares soar in the grey market
Shares of Paytm have soared more than 80 per cent in the grey market, according to people who deal in shares of unlisted companies. The gain is on optimism that the stock price will be valued at least 40 per cent higher than the current levels after the company goes public later this year. “The stock has run up from ~12,500 per share a month ago to ~22,000,” said Dinesh Gupta, director of Unlisted Zone.
Shares of digital payments company Paytm have soared more than 80 per cent in the grey market, according to people who deal in shares of unlisted companies. The gain is on optimism that the stock price will be valued at least 40 per cent higher than the current levels after the company goes public later this year.
“The stock has run up from ~12,500 per share a month ago to ~22,000. Traders are hoping that the stock will be valued at ~35,000 per share in the IPO. The company will go for a bonus issue to bring down the denomination,” said Dinesh Gupta, director of Unlisted Zone, a firm that facilitates buying and selling of unlisted company shares.
The Ant Group-backed company has obtained in-principle approval from its board to raise around ~22,000 crore through an IPO. The maiden offering is expected to hit the market before the end of the calendar year.
If the IPO goes through, it will be the biggest maiden offering in the country. According to reports, Paytm is looking at a valuation in excess of ~2 trillion in its IPO.
Market players said the current grey market price is pegging the valuation at around ~1.5 trillion. In November 2019, the company had raised $1 billion at a valuation of ~1.1 trillion. Paytm has emerged as one of the largest digital payment players in the country. It ranks third in terms of UPI payments, with a market share of around 12 per cent.
In March, it achieved over 1.4 billion transactions, against
1.2 billion transactions in February. This growth was driven by offline and financial services, said the company. According to the firm, it continues to register, on average, 15 per cent month-on-month growth.
The fintech firm, of late, has been focused on increasing its reach in the market and working on top-line numbers. The company recently launched a slew of products and services aimed at helping seasoned, as well as new-to-investment users. It aims to achieve over 10 million users and 75 million yearly transactions for Paytm Money, its stocks and mutual fund investment platform, in the financial year 2021-2022, with the majority of users from small cities and towns.
According to a recent report by Bernstein on Paytm, the company is ready to evolve into a full-fledged fintech platform from a payments business. The Paytm ecosystem covers payments (wallet/upi), merchant acquiring, credit saving, asset management, insurance and broking services to complement its ecommerce/e-ticketing platforms.
The company has also been rewarding its employees with stock options. In April, this year it added 242,904 stock options.