New Delhi: Despite a sharp 70 per cent jump in the unlisted shares of One97 Communications, the promoter firm of Paytm, in less than a week, dealers from the pre-IPO market are forecasting another 100 per cent jump from current levels.

Their calculations are based on estimated IPO valuations.

According to a research report by Planify, a pre-IPO consultancy firm, the total number of equity shares of Paytm stood at 5,75,33,866 as of FY19. The company raised $1 billion during the year, giving itself a valuation of $15.5 billion. That would peg per share valuation at Rs 18,000-18,500.

Since then, the company has neither diluted equity, nor has it raised more funds. Thus, it is assumed that the number of shares has remained the same. However, the annual reports for FY2019-20 and FY2020-21 are not in the public domain yet.

The Alibaba and Softbank-backed firm has decided to go public with a $3 billion (Rs 21,700 crore) initial public offering and is projected to seek a valuation of $25-30 billion (Rs 1.8-2.2 lakh crore). This would make it the largest IPO ever by an Indian company.

At $30 billion (Rs 2.17 lakh crore) valuation, Paytm would be placed among the top-20 domestic players by market capitalization and ahead of many blue chips like L&T, Ultratech Cement, Nestle, JSW Steel and Avenue Supermarts.

Founder Vijay Shekhar Sharma currently owns a 14.8 per cent stake in the company. Alibaba and affiliate Ant Financial together hold 37 per cent, while Soft Bank owns 20 per cent and SAIF Partners 19 per cent. Warren Buffet’s Berkshire Hathaway holds little less than 3 per cent.

There is a possible upside of up to 100 per cent in unlisted stock, as the company is eyeing double the valuation, compared with last fundraising, said Rajesh Singla, Founder, Planify. “If the number of shares remains constant, then at $25-30 billion valuation, each Paytm share shall be valued in the Rs 33,500-37,500 range,” he said.

According to reports, SoftBank is looking to sell shares worth around $1.5 billion, offering the Japanese multinational conglomerate its largest exit in India after Flipkart.

Shares of One97 Communications have rallied to Rs 18,500 from just Rs 10,000 in the unofficial market, as investors flocked to lap it up after the IPO announcement. The stock was trading at Rs 8,500 last May.

Dinesh Gupta, Co-founder UnlistedZone, is bullish about the long-term profitability of the company, and cited robust growth potential and diversification in financial services, provided within the single app. “A 70 per cent upside in the stock is still very much possible in the unlisted market. Sellers have vanished overnights,” he said.

Sandip Ginodia, CEO of Kolkata-based Altius Investech, is cautious on the stock. “Such valuations are absurd and investors are showing herd mentality here,” he said.

“They have simply calculated the price of the share based on the rumours, not the intrinsic value of the company. None of the divisions in the company is making profit, which should be reason for investors to be cautious,” he said.

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