The ₹18,300-crore initial public offering (IPO) of One 97 Communications – the parent company of digital payments and financial services platform Paytm — got oversubscribed 1.89 times on the final day, according to data from stock exchanges. The public issue is India’s largest stock market debut.

A total of 6,41,16,546 Paytm shares were traded against 4,83,89,422 shares available. The listing had attracted the highest percentage of retail subscriptions in excess of ₹1,000 crore on the opening day on November 8. This is a record for India, according to the company.

Qualified institutional buyers [QIBs] and domestic financial institutions, including banks and insurance companies, also placed their bids on Day 3. Reliance Securities and Canara Bank Securities subscribed for the long term, for instance.

“It is in a very exciting space but a very, very competitive space. They have now surged ahead of everybody and will have a great amount of liquidity. There will be a convergence in financial services and they are almost unchallenged in that space, except maybe by Bajaj Finance and HDFC Bank, which are the two companies that can still stand up to Paytm,” says analyst Harminder Sahni, founder, Wazir Advisors.

“As an investor you look at the ability for a company to earn. But their track record is contrary to that. Paytm has not been making money. If you saw their DRHP they have said they are not likely to make any money for the next few years, which is unnerving. If you look at their competitors like Google Pay and Amazon Pay which are well-financed, they will pose tough competition. Moreover, more than half of Paytm’s shareholding is held by Chinese companies such as Ant Group (29.7%) and Saif Partners (21%). It’s a Chinese company, really. So there might be an issue with financial stability. There may be a flight of capital as well. As a retail investor it is probably not the best idea to invest in Paytm. Just because something is over-subscribed does not mean it is the best investment,” says Sandeep Das, author of Hacks for Life and Career: A Millennial’s Guide to Making it Big.

Paytm started as a mobile wallet in 2009, but kept adding new businesses on its platform, including a payments bank, a Buy Now Pay Later tool called Paytm Postpaid, insurance, credit cards, aside from easy utility bill payments, etc.

Analysts at Reliance Securities have defended the company’s valuation of $20 billion, Paytm said in an official statement.

“The company’s ecosystem allows it to address large market opportunities, scale and reach, product, technology and leadership; we give this IPO a long-term rating,” according to analysts from Anand Rathi.

Das disagrees: “The classic theory is that if a company is not making money and will not make money for the next five years, it is by definition not a value stock. You expect a tech company to make money in seven-eight years. But they haven't made money in 10 years. There are better stocks around, of stable companies which can give me far better returns.”

Paytm had closed India’s largest anchor round on November 3 as it raised ₹8,235 crore. Blue-chip global investors and tech-focussed funds have made their first-ever investment in Indian the public market through the Paytm IPO, while investment giants like Blackrock, CPPIB and GIC have made their largest bets in an Indian IPO, according to a company note from Paytm.

The price band for Paytm shares was kept in the range of ₹2,080-2,150. The company was set to raise ₹18,300 crore from the markets through a fresh issue of ₹8,300 crore and an offer for sale of ₹10,000 crore.

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