The digital payment platform Paytm’s high-profile stock market debut got a chilly greeting from investors, who balked at the payments company’s valuation and lack of profits. The stock’s dive sliced Rs 38,000 crore of Paytm’s IPO valuation, leaving investors facing heavy losses, at least on paper. At the top end of the IPO price band, Paytm was valued at Rs 1.39 trillion.

On the BSE, the stock debuted at Rs 1,950, a 9 per cent discount to the issue price of Rs 2,150. However, it soon turned into a free fall, with the stock plunging 27 per cent in intraday trading as investors turned cautious. The stock closed at Rs 1,564.15, the lowest point of the day, resulting in the worst listing-day performance of IPOs of Rs 1,000 crore or more.

The disappointing debut of One 97 Communications Ltd, the company that runs the Paytm payments service, casts a shadow over the otherwise red-hot IPO market. The selloff in Paytm’s shares shows that investors are becoming more discerning about valuations and the stocks they choose to invest in.

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The company’s performance could knock off a couple of multiples from the valuations of technology IPOs in the near term, said an investment banker, who wasn’t part of the Paytm IPO. The person declined to be identified.