The initial stake sale of Rs 18,300 crore, which began on Monday, saw a subscription of 18 per cent at the end of the first day. This is the biggest IPO ever in Indian history.
According to National Stock Exchange (NSE) data, investors bid for 70,35,372 equity shares, or 0.34 per cent, as of 11.45 am, while the total issue size was 4,83,89,422 equity shares.
The portion reserved for retail investors got 99 per cent subscription, while the quota for institutional buyers received 29 per cent bids. BSE data shows that the quota of non-institutional investors was subscribed at 2 per cent so far.
One97 Communications, which has become a household name Paytm, has been one of the biggest beneficiaries of demonetisation. The IPO hit the market on the occasion of the fifth anniversary of demonetisation.
It is selling its shares in the range of Rs 2,080-2,150, with a face value of Re 1 each. Investors can bid for a minimum of 6 shares and multiples thereof.
The historic IPO will raise fresh equity of Rs 8,300 crore, while existing shareholders are selling shares worth Rs 10,000 through the offer for sale route.
Anchor allocation of Rs 8,235 crore, 10x subscription, and BlackRock, CPPIB and GIC lining up for allocation tell a story.
With the anchor round, 45 per cent of the issue is already subscribed, and chances are good that the issue will go ahead, given that 75 per cent of the IPO is reserved for Qualified Institutional Buyers (QIBs).
Long-term investors, who want to bet on the digitization of payments, investment and financial solutions, and are willing to ignore potential pitfalls and stiff competition in the near future, can subscribe to this issue.
Richa Aggarwal, Senior Research Analyst, Equitymaster, said that though talking about profits in tech companies was not in fashion, but in this case, a lot remains to be desired even on the parameters of growth. In FY 2011, the year of the pandemic, when the use of digital wallets and mobile payments increased, the company reported a drop in revenue, Agarwal said.
“Despite a 60 per cent cut in marketing and promotional expenses, losses continued and the road to profitability is unclear. While it is highly likely to be a successful IPO from a long-term perspective, it seems more like a speculative than a prudent investment bet,” he said.