In what was supposed to be the country’s breakout year the shocking two-day plunge by India’s Paytm after its initial public offering casts a shadow over the prospects for technology firms preparing to go public.
Retail investors, who bought an unprecedented amount of shares in Paytm’s parent One 97 Communications Ltd., have seen more than 35% of their value wiped out in just two trading sessions. Further losses may be in store if the stock slumps from its Monday closing price of Rs 1,359.6 to the Rs 1,200 predicted by Macquarie Group Ltd.
“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.
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