Paytm, an Indian digital payments firm, had its shares drop by more than 20% on its first day on the Mumbai stock exchange.
In the country’s largest ever initial public offering, the firm raised $2.5 billion (IPO).
Some investors have expressed reservations about Paytm’s loss-making business strategy.
Ant, a Chinese payments company, and SoftBank, a Japanese technology company, are among the firm’s major supporters.
Paytm’s first-day drop comes as Asia’s third-largest economy is engulfed in an IPO frenzy, with shares hovering at all-time highs. Since the beginning of the year, India’s benchmark BSE Sensex index has gained by about 25%.
This year, investors have poured billions of dollars into India’s start-ups, looking for possibilities in the country’s shattered economy.
Even before Paytm’s record stock listing, Indian firms had collected a total of $10.5 billion this year through initial public offerings (IPOs) in 2021.
Nykaa’s stock soared on its first day of trading last week, while Zomato’s food delivery service soared on its first day of trading in July.
Authorities have taken moves to attempt to chill the market due to the skyrocketing values of Indian IPOs.
The country’s markets regulator announced measures on Tuesday to tighten the limits on how corporations may spend money raised via initial public offerings.
This followed India’s central bank’s decision to limit the amount of money people can borrow to acquire shares in a new IPO.
Paytm’s platform was created in 2010 by Vijay Shekhar Sharma, who was once dubbed India’s youngest billionaire.
In a region where cash payments have historically prevailed, the firm soon became associated with digital transactions.
Prime Minister Narendra Modi’s government’s campaign to reduce the usage of cash, which included the demonetisation of virtually all banknotes in circulation five years ago, boosted Paytm significantly. It also benefited because, during the epidemic, individuals were less eager to utilize hard banknotes.
The platform’s blue-and-white QR code stickers are currently accepted by around 22 million business owners, taxi and rickshaw drivers, and other merchants in India.
Last year, the company processed more than $54 billion in transactions for its 337 million clients.