FIIs, domestic retail investors see Paytm IPO through

Mumbai: The Rs 18,300 crore initial public offering (IPO) by One97 Communications, parent of Paytm, scraped through on the final day of bidding on Wednesday with the help of foreign institutional and domestic retail investors. Domestic institutional investors and high net worth individuals mostly stayed away from the issue, India's biggest IPO, beating state-owned Coal India Ltd's Rs 15,200 crore share sale in 2010. The share is likely to be listed on the bourses on November 18.

The Paytm IPO received the lowest demand among tech startups that have gone public recently - Rs 19,653 crore, excluding the anchor book, compared with Rs 2.44 lakh crore for Nykaa or Rs 2.09 crore for Zomato. The Policybazaar IPO received demand worth Rs 56,000 crore.

The Paytm IPO received 91.3 million shares against an offer size of 48.4 million, translating into 1.89 times subscription.

Grey Mkt Premium Falls to ₹60/Share
The portion reserved for qualified institutional buyers was subscribed 2.79 times, while the retail investors' portion was subscribed 1.65 times.

Non-institutional investors, including high networth individuals, have put in bids for just 24% of the portion set aside for them.

Nearly 80% of the bidding came from foreign institutional investors while 16% came from local retail investors. HNIs bid for just 2.5 million shares, 2.77% of the total demand, while corporate, domestic institutes bidding was at just half a percent.

"We are overwhelmed with the outstanding response to the Paytm IPO shown by institutional investors, financial giants, mutual funds, and of course, retail investors," the company said in a press release.

Due to the lacklustre demand for the IPO in the first two days, it opened on Monday, the grey market premium crashed to Rs 60 from Rs 110 per share on Wednesday. As a result, funding was not available for HNIs, said a banker.

Last week, Paytm raised Rs 8,235 crore from 122 anchor investors, including top sovereign wealth funds and financial investors such as Singapore's GIC, Canada's CPPIB, BlackRock, Alkeon Capital, Abu Dhabi Investment Authority. BlackRock, CPPIB, and GIC have together invested more than Rs 2,516 crore.