SynopsisOne97 Communications shares, which is traded in the unofficial grey market, shot up from Rs 11,000 to Rs 18,500 per share in a week. The stock had hit Rs 19,000 early in 2020 before the Covid-19 crisis. It plunged to Rs 8,500 in May last year.
Mumbai: The unlisted shares of One97 Communications, promoter of Paytm, spiralled nearly 70 per cent last week after the company decided to go ahead with an initial public offer (IPO)—the largest ever by an Indian company. The country’s largest mobile payment firm, backed by China’s Alibaba and Softbank, is planning a public issue of around $3 billion (Rs 21,700 crore), which could value the company at $25 billion to $30 billion (Rs 1.81 – 2.17 lakh crore), according to news reports.
One97 Communications shares, which is traded in the unofficial grey market, shot up from Rs 11,000 to Rs 18,500 per share in a week. The stock had hit Rs 19,000 early in 2020 before the Covid-19 crisis. It plunged to Rs 8,500 in May last year.
“There are only buyers and hardly any sellers after the IPO news,” said Narottam Dharawat, founder of Mumbai-based Dharawat Securities. “While buyers are offering Rs 18K-19K per shares, sellers are demanding above Rs 20K.”
At the current share price in unlisted market, One97 is valued at around $15.5 billion (Rs 1.11 lakh crore), lower than the valuation at which it raised funds in November 2019.
The firm’s value in the unofficial market has raced past the market capitalization of listed finance firms such as SBI Cards & Payment Services, SBI Life Insurance, ICICI Prudential Life Insurance, or banks such as IndusInd, Bandhan, and Punjab National Bank.
“There is a mad rush to buy for One97 Communications shares in the last few days especially after the IPO news,” said Sambhav Aggarwal of Delhi-based Arms Securities, which deals in unlisted shares. “Shares which were traded at around Rs 11,000 till early last week are currently traded above Rs 18,000.”
Anil Goel, a Delhi based trader in unlisted shares, said shares of One97 are currently trading above Rs 18,000 per share.
Founder Vijay Shekhar Sharma currently owns a 14.8 per cent stake in the company. Alibaba and affiliate Ant Financial together hold 37 per cent, while Soft Bank owns 20 per cent and SAIF Partners owns 19 per cent.
For the financial year ended March 31, 2020, the total operating revenue of Paytm’s parent company One97 Communications grew by a little over 1 per cent to Rs 3,280 crore, while it cut its losses by 30 per cent to Rs 2,942 crore, according to its annual report.
The company raised $1 billion in Series G round in November 2019 at a valuation of $16 billion by issuing shares to several investors including SVF Panther, Alipay Singapore, T Rowe Price, Discovery Capital Ventura Capital among others. Shares were issued at $254.58 (about Rs 19,000) per share.
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