Paytm IPO subscribed 48 pc on day two; analysts rate the fintech startup's stock exchange debut

The initial public offering (IPO) of One97 Communications — the parent company of fintech startup Paytm —saw an overall subscription of 48 percent on the second day of bidding.

On Tuesday, Paytm's IPO received bids for 2.34 crore equity shares against an offer size of 4.83 crore shares. In fact, it also received positive responses from retail investors as the segment was subscribed 1.23 times.

The reserved portion of non-institutional investors was subscribed 5 percent, while qualified institutional buyers put in bids for 46 percent shares of the allotted portion.

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The Rs 18,300 crore issue of Paytm — touted as one of the biggest debuts in Indian bourses — was subscribed by 18 percent on Monday. The second biggest was of public sector Coal India of Rs 15,000 crore in 2010.

And while Twitter may be convinced that most of the retail subscription was driven by FOMO, the fear of missing out, Dalal Street analysts seem somewhat divided in their opinion of the startup's IPO.

Analysts also see an upside to Paytm's IPO, especially considering it is the largest fintech startup in the country, has been innovating rapidly, and is an iconic venture that's driving the conversation in India around financial inclusion.

Paytm's IPO comprises the issuance of fresh equity shares worth Rs 8,300 crore and an Offer for Sale (OFS) by existing shareholders to the tune of Rs 10,000 crore. It has already raised Rs 8,235 crore from anchor investors who subscribed at Rs 2,149 per share.

The public issue will see some of the existing shareholders of Paytm, including Founder Vijay Shekhar Sharma, SoftBank, Ant Group, and Elevation Capital, diluting their stakes. Vijay Shekhar Sharma will sell Rs 402.65 crore worth of shares through an OFS.