(Bloomberg) — One 97 Communications Ltd., which operates India’s pioneering digital-payments brand Paytm, fell in its trading debut in Mumbai as investors questioned the company’s valuations and path to profitability.

This contrasts with recent Indian internet IPOs which saw their shares soar on the first day.

The company’s shares fell as much as 19% to 1,706.15 rupees ($23.95) before paring losses, compared with the IPO price of 2,150 rupees, the top end of the marketed range in the country’s largest initial public offering. Paytm was able to raise $2.5billion in this sale, with retail investors bidding for almost twice as many shares.   

Macquarie Capital Securities India (India) Ltd. began coverage of the company, with an underperform rating. The price target was 1,200 rupees. This implies a more than 40% decline in the issue price. Anchor investors included BlackRock Inc (NYSE :)., Canada Pension Plan Investment Board) and sovereign wealth funds like that of Singapore.

“We believe Paytm’s business model lacks focus and direction,” analysts Suresh Ganapathy and Param Subramanian wrote in a report issued before the trading debut. “Unless Paytm lends, it can’t make significant money by merely being a distributor. We therefore question its ability to achieve scale with profitability.”

Vijay Shekhar Sharma founded Paytm two decades ago. He pioneered the use of digital payments in a country that primarily transacts cash and has 1.3 billion inhabitants. Pay Through Mobile is the name of Paytm. 

South Asian countries have already raised more than $15 billion through IPOs, a record in terms of total revenue. Bloomberg data as of November 15 shows that companies who started trading in 2021 experienced an average increase of 23% during their first session.

Paytm Market debut, funded by Berkshire Hathaway Inc . (NYSE:), SoftBank Group Corp. and Ant Group Co., comes in a standout year for India’s internet startups which have attracted billions of dollars from global investors. 

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The number of so-called unicorns in the country has doubled and public markets have witnessed strong listing performances of several, including food-delivery service Zomato Ltd., beauty retailer Nykaa’s parent FSN E-Commerce Ventures Ltd. and PB Fintech Ltd., operator of online insurance marketplace Policybazaar.

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