Indian mobile payments giant Paytm lost a quarter of its value on its market debut Thursday, after raising $2.5 billion in the country's biggest ever IPO, as traders questioned whether the loss-making firm would ever turn a profit.
Asia's third-largest economy has been in a grip of an initial public offering frenzy, with start-ups attracting billions of dollars in investment in a bright spot in the Covid-battered economy.
But while Paytm has established a leading position in the fast-growing marketplace for mobile payments it has lost money in each of the past three years and its market debut showed the limits of investor appetite.
Founder Vijay Shekhar Sharma, once named as India's youngest billionaire, wiped away tears from his eyes when the national anthem was played at the opening ceremony before trading began on the Bombay Stock Exchange.
The words of the song include the phrase "Bharat bhagya vidhata" -- "the one who will define the fortune of this country" -- and he said Paytm has "actually done that".
But the company tanked more than 25 percent from its IPO prices of 2,150 rupees within minutes of its open.
Sharma -- a schoolteacher's son who says he learned English by listening to rock music -- retains a 14 percent stake in the business, worth $2.4 billion at the IPO price but around $500 million less by mid-morning.
Other shareholders include Chinese tycoon Jack Ma's Alibaba group and associate Ant Financial, along with Japan's SoftBank and Warren Buffett's Berkshire Hathaway.
Ant Financial sold 3.5 percent of its 28 percent stake in the IPO to meet regulatory requirements that no shareholder should own more than 25 percent of a listed company. Alibaba continues to own another six percent.
Paytm's platform was launched in 2010 and quickly became synonymous with digital payments in a country traditionally dominated by cash transactions.
It has benefited from the government's efforts to curb the use of cash -- including the demonetisation of nearly all banknotes in circulation five years ago -- and most recently, from the pandemic.
Nearly 22 million Indian shop owners, taxi and rickshaw drivers and other vendors accept payments as low as 10 rupees ($0.13) using Paytm's ubiquitous blue-and-white QR code stickers.
The platform had 337 million customers at the end of June, according to the company's regulatory filing. In 2020-21 it handled transactions worth more than $54 billion.
Apart from Paytm, Indian companies have raised a record $10.5 billion through IPOs in 2021 so far, including beauty retailer Nykaa, which listed at an 80 percent premium last week.