PShares of One97 Communications, TM’s flagship company, fell for a second day. With this, it lost more than Rs 50,000 crore in market value. The loss to investors is more than 40 per cent.
At the National Stock Exchange, the stock fell by Rs 264 (17 per cent) to close at Rs 1,299. The stock, which was listed at a discount of 9% on November 18, closed at a loss of 27%.
Uncertainty in the company’s trading model and the assessment that it will affect the company’s profitability at a loss reflected in the stock.
Brokers have expressed concern over the move, putting pressure on investors. Macquarie’s assessment that the company has no sense of direction affected the stock. The brokerage firm has set a target price of Rs 1,200.
Simultaneous involvement in multiple businesses will prevent the company from being at the forefront of categories other than wallet. It will affect the growth potential. Macquarie estimates that the company will not be able to make good returns as a distribution company.
The IPO price was at Rs 2,150 per share. It was listed at Rs 1,950 with a discount of 9.3 per cent.