Shares of Indian digital payments giant Paytm headed for the lowest close since their market debut last month, signaling continued investor doubts over the startup’s path to profitability.
The stock dropped as much as 5.6% to 1,321 rupees ($17.4) in Mumbai, extending this week’s losses. It slid almost 8% on Dec. 15 after a post-listing lockup on sales of shares allotted to anchor investors expired, and is down nearly 39% from its issue price of 2,150 rupees.
“Paytm shares will continue to be under pressure as there is clearly no follow-up buying by large institutional investors even at this price. Main reason for this is the company’s inability to coherently articulate a path to profitability,” said Abhay Agarwal, founder of Mumbai-based Piper Serica Advisors Pvt., an investment management company.
“The management’s only defense has been that investors do not understand its business. In a market that is already under pressure, investors are scurrying for safety and away from loss-making companies like Paytm,” he said.
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