Paytm shares and their steep rise

Shares of the payment company are available at three times its valuation in 2016

After studying law I vectored towards journalism by accident and it's the only job I've done since. It's a job that has taken me on a private jet to Jaisalmer - where I wrote India's first feature on fractional ownership of business jets - to the badlands of west UP where India's sugar economy is inextricably now tied to politics. I'm a big fan of new business models and crafty entrepreneurs. Fortunately for me, there are plenty of those in Asia at the moment.

g_109817_paytm_280x210.jpgImage: Shutterstock

Fancy a slice of paytm’s parent One97 Communications? Unlisted shares are available at a valuation of ₹96,000 crore. Over the last month, brokers have been offering them for ₹20,200 a share. At a minimum lot size of 100 shares, it is an investment of ₹20.2 lakh.

The development comes a little over a month after Berkshire Hathaway invested $300 million in the firm at a $10 billion valuation. Company employees are willing to exit their Esops at a 30 percent premium, which brokers have been selling to their high net worth clients. Unlisted shares usually carry high brokerage fees and the difference between a buy and sell quote can be as high as 5 percent.    

Brokers Forbes India spoke to said the shares quoted at about ₹7,500 in November 2016 when demonetisation was announced; they were about ₹11,500 in the first quarter of 2018. The steep rise may mean new buyers would have to wait for a while before they are able to see meaningful gains and exits.  

(This story appears in the 26 October, 2018 issue of Forbes India. You can buy our tablet version from Magzter.com. To visit our Archives, click here.)

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