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Dozen Indian IPOs now under extra investor scrutiny after Paytm debacle

Planned smaller IPOs could have a harder time pricing shares if there is a reduced appetite for new listings

Topics
Paytm | initial public offerings IPOs | Investors

Filipe Pacheco & Nupur Acharya | Bloomberg 

Paytm
Paytm shares have fallen about 30% since it started trading last week, with a rebound on Tuesday not enough to erase losses from the two previous sessions | Photo: Bloomberg

At least a dozen Indian working on initial public offerings are now under extra investor scrutiny following the disastrous debut of digital payments startup Paytm, the country’s biggest ever IPO.

Offerings on the radar include that of Oravel Stays Ltd., the operator of hotel-booking startup Oyo, which is looking to raise nearly $1 billion. Other sizable listings include API Holdings Ltd., the parent of online pharmacy PharmEasy, and logistics company Ltd.

Planned smaller IPOs could have a harder time pricing shares if there is a reduced appetite for new listings. The shares of rival One Systems Ltd. have fallen about 40% in the so-called grey market.

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ALSO READ: Spoiling the party: Paytm debacle roils market for unlisted shares

shares have fallen about 30% since it started trading last week, with a rebound on Tuesday not enough to erase losses from the two previous sessions. Some that were seeking to benefit from the flood of transactions in India’s booming IPO market so far this year may now rethink the timing and pricing of their issues, according to Edelweiss Financial Services Ltd.

Valuation is likely to become the main sticking point for those seeking to tap the market. Paytm’s valuation -- around 26 times price-to-estimated sales for the financial year 2023 -- towers above the benchmark S&P BSE Sensex Index on about 4 times.

--With assistance from Saritha Rai.

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First Published: Wed, November 24 2021. 08:43 IST
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