In what looks like a BharatPe vs Paytm war, founder Ashneer Grover has officially criticised Vijay Shekhar Sharma’s decision to “misprice” the fintech firm's public offering, adding that a failed listing ends the frenzied cycle of IPOs in India.
Following a debut fiasco at the Bombay Stock Exchange, Paytm’s stocks continue to tank. It saw the worst performance in recent history by tanking 27 percent to Rs 1,560 from the issue price of Rs 2,150 apiece.
In an interaction with Moneycontrol, Grover whose firm recently got a small finance bank licence said the company gave Chinese investors their money back at the cost of the public market.
“I used to tell investors that there’s going to be two markets -- pre-Paytm and post-Paytm because post Paytm is going to tank and that is exactly what has happened. The reason is quite simple, you have mispriced your IPO,” Grover said.
“You did a Rs 18,300 crore IPO out of which 55 percent was secondary. You did a price optimisation. It’s the Chinese investors who sold their shares through this IPO. Indian market ko kharab karke apne Chinese investors ko unka paisa wapas diya hai. (You disrupted the Indian market to return Chinese investors’ money),” he added.
According to Grover whose company became a unicorn earlier this year, this development is likely to have a huge impact on the upcoming IPOs including that of LIC in India.
LIC is expected to file the draft prospectus in the next two weeks in what is touted to be the country’s largest public listing.
“All the upcoming IPOs are now likely to be repriced including that of LIC which was supposed to be the biggest so far. The government had to divest. If it gets to lower price then the government will face issues as their target of disinvestment will not be met,” he said.
Moneycontrol has reached out to Paytm. The story will be updated once they respond.
Sharma, on the other hand, is learnt to have told employees to keep their heads low and not get perturbed by the market perception and focus solely on expanding the business.
It is not often that founders of top companies or CEOs lambast competition in public. Moneycontrol has reached out to Paytm for a comment. The story will be updated once they respond.