Why did Paytm crash? How to avoid such IPO?
Why Paytm fell so much?
1. Paytm's Rs 18,300 crore IPO, which was the country's largest- this meant a large supply which needed large demand to support it's price.
2. But was subscribed 1.89 times only, this meant lack of demand.
3. Paytm is yet to turn profitable and Is likely to report losses for coming few years.
4. All above points created negative sentiments, people were looking to sell on listing but demand was not enough to support price and we had such a huge fall.
How to avoid such IPO?
1. Check their financial data. Check how their business has performed and their future guidance. Different brokerage house provide these reports, check them.
2. Check subscription levels, it shows the demand or interest which is most important, should be high.
If you have any doubt or query you can mention it in comments section.
1. Paytm's Rs 18,300 crore IPO, which was the country's largest- this meant a large supply which needed large demand to support it's price.
2. But was subscribed 1.89 times only, this meant lack of demand.
3. Paytm is yet to turn profitable and Is likely to report losses for coming few years.
4. All above points created negative sentiments, people were looking to sell on listing but demand was not enough to support price and we had such a huge fall.
How to avoid such IPO?
1. Check their financial data. Check how their business has performed and their future guidance. Different brokerage house provide these reports, check them.
2. Check subscription levels, it shows the demand or interest which is most important, should be high.
If you have any doubt or query you can mention it in comments section.
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