Benzinga | Nov 18, 2021 03:47PM EST

Alibaba-SoftBank Backed Indian Fintech Giant Disappoints On Trading Debut

* SoftBank Group Corp (OTC:SFTBY) (OTC:SFTBF) and Alibaba Group Holding Ltd (NYSE:BABA) backed Indian fintech giant Paytm lost more than 27% on its trading debut, TechCrunch reports.

* The 11-year-old company has sold itself as India's equivalent to Chinese financial groups like Alibaba-backed Ant, with businesses in everything from mobile payments, insurance, bank deposits and remittances, and fantasy sports to gold trading, Financial Times reports.

* However, domestic institutions, including mutual funds, were skeptical about its path to profitability and ability to compete with Big Tech competitors like Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL) Google.

* While some investors had questioned Paytm's lack of profits and its high enterprise value of around 27 times gross profit, the extent of its price fall shocked many and knocked off over $5 billion off Paytm's IPO valuation, Reuters reports.

* The firm's valuation, which raised $2.5 billion in India's most extensive IPO, stood at $13.6 billion at the close of trading on local stock exchanges, compared to the $20 billion valuations the firm targeted.

* Paytm was valued at $16 billion in private markets when it raised $1 billion in late 2019.

* Ant and SoftBank had cut their stakes in the IPO. Ant reduced its to 23% from 28%, and SoftBank's Vision Fund pared its holding by 250 bps to 16%.

* Related Content: Alibaba Is The Real Winner From India's Biggest IPO - Read How

* Price Action: BABA shares traded lower by 11.40% at $143.14 on the last check Thursday.