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Paytm Shares Hit A Record Low As The Price Drops By 65%

One97 Communications, parent company of Paytm, has been in a free fall since its listing on the Indian exchanges on Nov 18, 2021.

On November 8, 2018, Paytm’s market capitalization was a little over Rs 1.39 lakh crore at the issue price of Rs 2,150. But by Tuesday, March 8, this value had eroded to Rs 47,844 crore.

As a result, in just about 3 months or more, Paytm’s market capitalization has fallen below Rs 50,000, a steep decline of 65.6%.

Paytm’s Market Valuation Falls Under Rs 50,000 Crore

The escalating Russia-Ukraine crisis has affected the global economy in every way, especially with the wild swings in oil prices, which have broken records and touched multi-year highs.

As much as it is crippling global economies, such geopolitical tensions are impacting the Indian economy on a serious note too.

Due to massive selling caused by the uncertainty and inflation worries created by the Russia-Ukraine crisis, the domestic market has been experiencing a continuous decline since the past 4 days.

As a result, Paytm shares have been further devalued, as it had been performing poorly even before the war.

On Tuesday, the fintech company’s shares ended over 2% higher, with a market cap of Rs 47,844 crore, just under Rs 50,000 crore.

Paytm’s Valuation Eroding Continues

Paytm was listed on November 18 but was offered at a discount of 9.3% against its issue price of Rs 2,150, at Rs 1,950 per share, and ended the day 27.4% lower.

Paytm is is the country’s biggest IPO so far, while the fourth biggest IPO globally, with a valuation of Rs 18,300 crore.

On the second day of its listing, the stock plunged even further, declining 10% more, and its market capitalization fell by Rs 50,000 crore. This marks about a 37% decline since the stock was listed.

The stock’s IPO turned out to be overvalued, so investors took profits. The stock free fall continues despite a 50% drop from its issue price of Rs 2,150.

Due to the overvaluation of Paytm’s stock, renowned foreign brokerage Macquarie expressed hawkish views on the listing.

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