Yesha Shah, Head of Research, Samco Securities
The company is seeking a $ 20 billion valuation at a price of 49 times the AF21 sales. Considering the current operational matrix, the evaluation appears onerous. Considering the long-term growth outlook, current financial parameters and rich valuations, only risk tolerant investors with a medium to long term horizon should subscribe to the offer.
Jyoti Roy, equity strategist, Angel One
While valuations may seem expensive, Paytm has become synonymous with digital payments via mobile devices and is a market leader in the mobile payments space. Paytm is well positioned to benefit from 5x exponential mobile revenue growth in AF21-26 and the valuations are justified.
Saurabh Joshi, Marwadi’s stock and finance analyst
We assign a rating to avoid on this IPO as valuations are challenging for a losing company. Considering the final 12-month earnings (June 2021) on a post-issue basis, the company will list a market cap with sales of 44.36 times. There are no listed companies in India whose business is comparable to that of the company’s business.
Richa Agarwal, Senior Research Analyst, Equitymaster
In FY21, the year of the pandemic, when digital wallets and mobile payments increased, the company experienced a decline in revenues. Despite a 60% cut in marketing and promotional spending, the losses have continued and the road to profitability is unclear. More money is raised from the offer to sell by existing shareholders than the new issue. While it is very likely to be a successful IPO, from a long-term perspective, it looks more like a speculative bet than a prudent one.