Paytm Investors' Agony Continues As Shares Plunge FurtherPaytm shares fell massively on the second day of trading

After a disappointing stock market debut on Thursday, Paytm's parent company One97 Communications's shares fell over 17 per cent on the second day of trading at around 12 pm. According to BSE data, it was priced at INR 1,288 apiece.

At 11:40 am, Paytm shares fell to INR 1,376.35 on the National Stock Exchange down 11.82 per cent over its previous closing price and to Rs 1,365.05 on the BSE, down 12.73 per cent. On BSE, it opened at INR 1,500 on Monday.

In its stock market debut on Thursday, Paytm's shares crashed 26 per cent. This came as a shock to investors, especially as it came after a mega initial public offer (IPO), the biggest ever in India. The stock opened for trading at INR 1,950 on the NSE. This marked a decline of 9.3 per cent from its issue price of INR 2,150, much lower than what was anticipated.

The IPOconsisted of a fresh issue of INR 8,300 crore and an offer for sale (OFS) by existing shareholders of INR 10,000 crore. It was subscribed 1.89 times last week. The company allocated shares worth INR 8,235 crore to more than 100 institutional investors.

International brokerage house Macquarie wasimmediately commented sayingby many media platforms that Paytm lacks a proper business model. It called Paytm a "cash guzzler', keeping the target price at INR 1,200, which is a 44 per cent.

"Dabbling in multiple business lines inhibits PayTM from being a category leader in any business except wallets, which are becoming inconsequential with the meteoric rise in UPI payments. Competition and regulation will drive down unit economics and/or growth prospects in the medium term in our view," the research house said.

It also added that dabbling in multiple business lines restricts Paytm from being a category leader in any business except wallets, and unless the company lends, it can't make significant money.