Paytm's IPO flop may disillusion millions of retail investors

“The event in a way will nudge people to be cautious and not take the market for granted by blindly placing bets,” said an investment expert. “It is important that a company’s story and prospects are well understood by investors”,he said.

India’s equity markets have been on a tear this year, buoyed by a central bank that slashed interest rates to a record low and millions of new individual investors seeking higher returns in riskier assets. The rally has encouraged at least half-a-dozen technology startups to seek to public listings, including SoftBank Group Corp.-backed Oyo Hotels & Homes and logistics provider Delhivery Pvt.

At least some of the IPO prospects that have been “on the periphery” and looking to benefit from the flood of transactions, may now rethink the timing and pricing of their issues, he said. MobiKwik may delay its IPO by a few months due to lack of demand from investors and a 30%-40% drop in valuation, the Economic Times reported Tuesday citing sources it didn’t identify.

Firms in the South Asian nation have raised about $15 billion through IPOs this year, already an annual record by total proceeds. Critics have been questioning valuations on some of these IPOs, given they are still loss-making companies.