The slump is 'no indicator of the value of our company,' says Vijay Shekhar Sharma.
Vijay Shekhar Sharma wiped away tears of joy as he recounted his rise from a “commoner” to the leader of a digital payments giant that just completed India’s biggest-ever initial public offering.
“The dreams of a young country are with me,” said the founder and chief executive officer of One 97 Communications Ltd., operator of the Paytm service, before striking the opening gong at the Bombay Stock Exchange at 10 a.m. local time on Thursday.
By 11 a.m., Sharma’s long-anticipated coming-out party had turned into one of the worst opening days for a blockbuster tech listing since the dot-com bubble. The stock’s 27% plunge surprised even some Paytm pessimists, casting doubt on a record-breaking run for Indian equities and leaving Sharma -- and his underwriters -- to face tough questions about what went wrong with the $2.5 billion fundraisings.
The short answer is that Sharma’s grand ambition to make Paytm’s IPO the country’s largest ever backfired. The founder had made no secret of the fact that he wanted his company’s debut to surpass the long-standing IPO record set by Coal India Ltd. in 2010. Indeed, there would be symbolism in a startup that processes payments in bits eclipsing the state-run mining giant.
Instead, Paytm now looks like an example of stunning overreach. The company, with support from leading banks like Morgan Stanley and Goldman Sachs Group Inc., pushed up both the price and the size of the stock offering to the breaking point. Retail investors who piled into the offering are now sitting on heavy losses, along with global giants like BlackRock Inc. and the Canada Pension Plan Investment Board.
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