Paytm IPO: What GMP signals on last day of subscription

Market


One97-owned Paytm IPO (Initial Public Offering) opened for subscription on 8th November 2021 and it will remain open for bidding till 10th November 2021. So, today is the last day to apply for the largest-ever public issue of the Indian capital markets. After two days of subscription, the public issue worth 18,300 crore has been subscribed 48 per cent. Following the tepid response by bidders, grey market has gone down flat in regard to the Paytm IPO.

Paytm IPO GMP

According to market observers, shares of Paytm are trading at a premium of 55 in the grey market today, which is 5 lower from its yesterday’s grey market premium of 60. Market observers went on to add that Paytm IPO GMP has been nosediving ever since it became available for trade in the grey market. They said that Paytm IPO grey market premium has fallen from 150 to 55 in the last one week. They said that Paytm IPO GMP was expected to improve after the subscription opening, but after this ‘not so encouraging’ response from the bidders, Paytm share price has further gone down in the grey market.

What this Paytm IPO GMP mean?

Market observers said that Paytm IPO GMP today at 55 simply means that grey market is expecting 55 premium from the public issue on listing date. They said that as per the grey market premium, Paytm IPO is expected to list at 2205 ( 2150 + 55), which is almost at par with its price band of 2080 to 2150 per equity share.

Paytm IPO subscription status

After two days of bidding, Paytm IPO has been subscribed 48 per cent. The public issue worth 18,300 crore has been subscribed 123 per cent in the retail category, 46 per cent in the QIB (qualified institutional buyers) category, and 5 per cent in the NII (non-institutional investors) category.

Speaking on the reasons for not so encouraging Paytm IPO subscription status after two days of bidding; Abhay Doshi, Founder at UnlistedArena.com said, “Two foremost reasons I believe are expensive valuations and continuing losses. At upper band, post-issue, sales to market comes around 49 times, which is expensive. Road to profitability also seems challenging which has made investors wary.”

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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