Paytm founder Vijay Shekhar Sharma said his biggest regret has been not choosing the right bankers for his company’s initial public offering (IPO), back in November 2021.
"I have been an entrepreneur long enough now. I have a regret of not choosing the correct bankers for the IPO," Sharma said at Tie Delhi NCR’s India Internet Day 2024 on September 27.
"Bhagawan ke mandir mein jaane k liye, apko sahi pujari chahiye hota hai...shayad humne vo nahi choose kiya." What he said meant, "To enter the temple of God, you need the right priest... perhaps we didn't choose the right one."
Sharma then bowed before the audience in penance, emblematic of the turmoils that his company has since gone through.
Sharma adviced other entrepreneurs to "choose the right banker."
A near 60 percent shave off in the share price of Paytm since listing makes the regret of founder Vijay Shekhar Sharma even more evident, more so at a time when the stock market is in a booming bull run and IPOs are debuting almost every day to overwhelming demand.
"Nowadays even small IPOs get so big," Sharma said, a reference to the overwhelming subscription and listing gains that some of the mainboard as well as SME IPOs have registered this year.
Sharma's statement comes against the backdrop of market regulator Securities and Exchange Board of India (SEBI) issuing show cause notices to him and other board members of Paytm over alleged misrepresentation of facts during the IPO process and non-compliance with shareholder classification norms.
The notices pertain to Sharma’s alleged non-compliance with promoter classification norms. The probe was initiated based on inputs from the Reserve Bank of India (RBI), which had examined Paytm Payments Bank earlier this year, the people cited above said.
At the heart of the matter is whether Sharma should have been classified as a promoter, given that he had management control rather than an employee, while filing the IPO documents.
Paytm in its clarification had said that it is in regular communication with SEBI and making necessary representations regarding this matter.
As per the DRHP, the Paytm IPO was managed by i-banks including Morgan Stanley, Goldman Sachs, Axis Capital, ICICI Securities, JP Morgan, Citi and HDFC Bank.
The stock debuted below its issue price in November 2021, with shares dropping to Rs 1,560.80 on the NSE, significantly lower than the final issue price of Rs 2,150.
Vijay Shekhar Sharma also recalled his challenge during the early years, when funding was not easy to get.
"I did not get VC luck till 7 years of my company starting. My Series A happened in 2007 while in started the company in 2001. So, I am a bootstrapped entrepreneur who had to do a lot cash generation. And in that rush, I learnt one thing, there is nothing called P&L. The real truth is cash, everything else is trash."
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