After Paytm’s parent firm One97 Communications had a disappointing debut on India’s stock markets on Thursday, Vijay Shekhar Sharma, its founder, and chief executive told us it should only be seen as a first-day reaction and not a reflection of the company’s long-term performance.
Paytm’s IPO, the largest-ever in India, followed successful listings by tech startups such as Zomato, Nykaa, and Policybazaar.
Sharma said the business models of fintech platforms such as Paytm were not as well understood as those of other startups that have gone public. “These are easy-to-understand models… If I sell a wallet or a phone, or I can pick up food from a restaurant … then you know the business model… compared to how do you (payments) acquire customers? How do you make money and what’s cross-selling like? These are questions asked by public market investors,” Sharma told us after the company’s first day of trading.
He said stock markets are “opinion-polls” in the short term and “weighing machines” in the long term. “Stock market cannot impact the purpose of the company,” he said.
Sharma, who was in high spirits despite the disappointing first day of trading, said it was “incredibly tough” being the first in the industry to build a large-scale firm and take it public. He cited the example of Flipkart founders Sachin Bansal and Binny Bansal, who he said set the bar for private funding in the Indian startup sector when they racked up $1 billion in 2014 on the back of the super successful Alibaba IPO. The massive fundraise had led to intense dealmaking for a year when India saw its first tech and startup boom.