paytms initial public offering ipo being touted as the biggest in indias corporate history had been subscribed 48 percent on november 9 the second day of bidding receiving bids for 234 crore equity shares against offer size of 483 crore sharesthe portion set aside for retail investors was subscribed 123 times while the reserved portion of noninstitutional investors were only partly sold however oversubscribed by 10x the anchor round saw participation from a wide range of global investors such as singapores gic canada pension plan investment board and blackrock through this round of financing paytm has already raised almost half of its rs 18300 crore target but the asking valuations for a lossmaking firm are looking a bit stretched for many analysts paytms muted subscription so far is starkly different from the bumper listing of nykaa last week that got a 100 retail subscription within the first hourso what are the reasons for the lackluster investor demand for paytms ipolofty valuation the paytm initial share sale aims to raise rs 18300 crore at a band of rs 20802150 valuing the company at rs 139 lakh crore at the top end the ipo is valued at 437 times fy21 pricetosales which translates into a discount of 12 to the recentlylisted unicorn zomatothe lofty valuation of paytm has kept investors away from rushing to subscribe to the ipo on the first day like noticed in the past several ipos it looks like the subscription from the retail investors is mainly for the listing gains in fy21 when use of digital wallet and mobile payments surged the company posted a decline in the revenues despite a 60 percent cut in marketing and promotional expenses the losses continued and the road to profitability is unclear said guarav garg head of research at capitalvia global researchit is still lossmaking paytm is in its 11th of operations as a digital payment company but is still a lossmaking firm it has posted losses for the last eight consecutive years while spending billions into a variety of business segments including insurance sales wealth management digital gold travel and movie ticketing fantasy sports ecommerce and also launched a payments bank a bank operating on a smaller scale without involving any credit risk we expect to continue to incur net losses for the foreseeable future and we may not achieve profitability in the future the company stated in its drhpour profitability depends on the costeffectiveness of our businesswhen we become a listed company we will incur additional significant legal accounting and other expenses that we did not incur as an unlisted company paytm said in the prospectus moreover while the revenue of the company has been growing their market share has actually been shrinkingthis is an additional problem for companies going public as in order to show a better picture while going public whether it is zomato or paytm in pursuit of lower losses they tend to give up market share if they are competing with companies which are