Sebi likely to quiz investment bankers on Paytm’s listing fiasco
The Securities and Exchange Board of India (Sebi) intends to probe the investment banks that handled Paytm’s IPO, the country’s largest ever, regarding the listing catastrophe.The capital markets regulator will inquire why why the stock plummeted on the first day of trading. It also intends to look into whether any comments made by corporate officials or bankers may have deceived investors, according to two sources familiar with the matter.
Paytm’s stock dropped 27% in its first day of trade on Thursday, wiping away Rs 38,000 crore from the company’s market capitalization. This was the worst first-day performance for an IPO worth more than Rs 1,000 crore.While profits on the first day of trading aren’t certain, such a precipitous drop has never been witnessed before. Sebi will investigate what went wrong, given the magnitude of the problem. “It will also look into the trading trend on the day of the IPO,” an official added.
Sebi did not respond to requests for comment right away. Emails addressed to some of the institutions involved in the IPO received no immediate response.Investors were hesitant about the IPO, which garnered only 1.9 times subscription and generated bids worth less than Rs 20,000 crore. A day before the IPO, Paytm distributed shares worth Rs 8,235 crore to anchor investors. According to some news reports, the anchor investor part of the IPO was oversubscribed by ten times.
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