Lessons from Paytm’s IPO Experience: Insights from Vijay Shekhar Sharma
At the recent India Internet Day 2024, Vijay Shekhar Sharma, the founder of Paytm, openly shared his reflections on the company’s initial public offering (IPO). His candid remarks shed light on some critical lessons that aspiring entrepreneurs should consider when navigating the complex world of financing.
The Importance of Choosing the Right Banking Partner
Sharma expressed profound regret regarding the selection of bankers for Paytm’s IPO, emphasizing the crucial role that financial partners play in a company’s success. He stated, “We did not choose the right banker! It is vital to select the appropriate banking partner.” His words serve as a reminder to entrepreneurs to conduct thorough research and analysis when choosing financial advisors or investment banks, as the right partnership can significantly impact a startup’s trajectory.
Comparing Paytmโs IPO to Infosys
During his discussion, Sharma drew comparisons between Paytm’s IPO experience and that of Infosys. He highlighted a stark contrast, stating, “During Narayana Murthy’s era, even a driver earned Rs 1 crore, whereas during Paytmโs listing, there were at least 20 individuals who made Rs 100 crore.” This comparison illustrates the vast difference in financial outcomes and market reception, hinting at what could have been achieved with better guidance from financial institutions.
| Event | Details |
|---|---|
| IPO Date | November 18, 2021 |
| Issue Price | Rs 2,150 |
| Listing Price | 9% discount at Rs 1,564.20 |
| Total Subscription | 1.9 times |
Challenges in Venture Capital Funding
Sharma further shared his personal experiences regarding the challenges he faced in securing venture capital funding. He revealed, “I did not receive any venture capital funding until 7 years after starting One97.” This insight serves to underline the perseverance required in the startup ecosystem, as gaining trust from investors can be a long and arduous journey.
The Essential Role of Cash Flow Management
One of the key takeaways from Sharma’s speech was the significance of effective cash flow management, which he asserted is essential for the survival of any startup. Entrepreneurs must closely monitor their financial health to navigate through the inevitable ups and downs of business.
A Message of Resilience
In closing, Sharma offered words of encouragement for aspiring entrepreneurs. He affirmed, “Even when you face failure repeatedly, you should recognize that you can rise again.” His emphasis on resilience serves as a vital reminder that setbacks are often part of the entrepreneurial journey and can lead to greater successes if one continues to persevere.
