Paytm parent One97 Communications’ shares extended losses for the second straight session and tanked over 13 per cent.

For those who had subscribed to the IPO and are still holding on to the shares, almost Rs 51,000 crore of market value has been eroded even as the total losses to the investors stand at almost 40 per cent over the issue price.

However, founder Vijay Shekhar Sharma has compared the company to Tesla Inc and told employees that the electric vehicle maker also had to face a poor run at the markets initially and later went on to become well-recognised globally. Sharma also told them to not get worried about the poor listing and concentrate on expanding the business.

While many have questioned the expensive valuations of the IPO, Ashneer Grover of BharatPe has hit out against Sharma. Speaking to CNBC TV18, he said the public float was a cumulative failure of the company’s management and the investment bankers and that its fall is ‘category killing’.

The One97 Communications scrip on Monday ended at Rs 1,360.30 on the BSE, a drop of 13.03 per cent or Rs 203.85 over the last close as investors remained wary about its business model.

This led to its market capitalisation falling below the Rs one lakh crore to Rs 88,184.67 crore.

It may be recalled that at the upper end of the IPO price band of Rs 2150 per share, the company would have been valued at Rs 1.39 lakh crore. This close means that around Rs 50,815 crore of its market value has been wiped out. Today’s sharply lower also takes the total loss to the issue price to 37 per cent.

The weakness in the counter came despite Paytm saying that the strong operating performance continued in the month of October, with increasing numbers of consumers and merchants transacting on its ecosystem. It disclosed that the growth momentum in gross merchandise value (GMV) continued in the month driven by festive season spends, as well as an increase in number of merchants and consumers, adoption of new products, transactions for both online and in-store merchants, and in deployed devices. GMV processed through its platform aggregated to Rs 83200 crore a rise of 131 per cent over the month of October 2020.

Just ahead of its listing, brokerage Macquarie initiated coverage on the stock with an underperform rating and a target price of Rs 1200 which was sharply lower than the issue price. Its analysts said in a note that Paytm’s business model lacks focus and direction and that achieving scale & profitability is a big challenge for the cash guzzling company.