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Paytm plunge reveals cold new world for Asian fintech leaders

There was a time when Paytm was the epitome of rising digital Asia, but the dismal opening of its IPO suggests it and its peers are no longer market darlings in the eyes of investors.

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The first-day performance of Paytm’s record-breaking IPO tells us something about shifting attitudes towards Asia-based fintechs, who a few years ago could do no wrong.

Paytm – listed as One97 Communications – dropped 25% from its offer price in the first hour of trading on Thursday in India’s largest IPO, which raised the equivalent of $2.5 billion. It came close to triggering the exchange’s circuit breaker and halting trading.

It was not supposed to be like this. Paytm has, for years, seemed to be the right company in the right place at the right time with the right backers.

When Euromoney interviewed the company’s executives in 2017, they were on the crest of a wave. Vijay Shekhar Sharma’s company had grown from a prepaid mobile web-charge website to the largest mobile payment service platform in India, with Alibaba and its own payments arm Ant Financial as major backers.

It had turned the chaos of prime minister Narendra Modi’s 2016 demonetization shock into a considerable advantage, becoming the wallet of choice for a nation suddenly deprived of cash. It was the perfect embodiment of the ecosystem play: a business that inserted itself into every element of ordinary life, from insurance to remittances, flights to gold sales.

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