One 97 Communications, the company that operates PayTm, had a weak debut on the exchanges on November 18, falling 9% on listing day. The stock opened at Rs 1,950 on the National Stock Exchange and listed at Rs 1,955 on the BSE, compared to the issue price of Rs 2,150. Paytm shares continued to fall after the market opened, falling as much as 25% from the issue price to an intraday low of Rs 1586.25 on the BSE.

Also Read| Paytm listing on BSE, NSE: Carrying young India’s hopes to stock market, says chief

Last week, Paytm’s Rs 18,300 crore IPO, the country’s largest, was subscribed 1.89 times. Despite a drop in Paytm shares on debut, the firm was valued at more than Rs 1 lakh crore.

Analysts attributed the drop in Paytm’s stock price on its first trading day to the company’s expensive valuations.

Also Read| Paytm IPO: Check grey market price, How to check allotment status

Macquarie Research analysts said in a client note that Paytm’s business model lacked “focus and direction,” and they commenced coverage with an underperform rating. “Achieving scale with profitability is a big challenge,” said the note, referring to the corporation as a “cash guzzler.”

Also Read| Explained: All about Paytm IPO, India’s largest public issue

Paytm’s initial public offering (IPO) included a fresh issue of Rs 8,300 crore and an offer for sale (OFS) by existing shareholders of Rs 10,000 crore. Paytm distributed shares worth Rs 8,235 crore to over 100 institutional investors, including the Singapore government, ahead of its largest stock market debut.

According to a regulatory statement dated November 3, Paytm drew interest from 122 institutional investors, which purchased more than 3.83 crore shares for Rs 2,150 each.

Also Read| Paytm may consider offering Bitcoin if India legalizes cryptocurrency

Paytm was launched in 2010 by engineering graduate Vijay Shekhar Sharma as a platform for recharging mobile phone plans. The startup expanded swiftly after ride-hailing operator Uber included it as a quick payment option in India, and its use increased further in late 2016 as a result of the surprise ban on high-value currency notes, which encouraged digital payments.

Paytm shares were trading 21.21% lower than the issue price at Rs 1,694 at 11:00 am on the BSE.