India's payments giant Paytm had a blockbuster initial public offering in 2021 — but one fund manager at Baillie Gifford said he did not buy into the IPO as he saw better investment options. There were a number of public listings last year in India's technology sector, which meant competition for capital was plenty, according to Roderick Snell, an investment manager at Edinburgh-based Baillie Gifford. "We were quite selective," he said, during CNBC PRO Talks with Tanvir Gill on Wednesday. Some of the Indian technology names that Baillie Gifford invested into included food delivery start-up Zomato , online insurance aggregator Policybazaar and insurer Star Health , Snell said. "We thought they were better investments than Paytm." Despite raising about $2.5 billion in capital in what is so far India's largest IPO, Paytm shares had a disappointing market debut . As of Wednesday afternoon, Paytm shares were down more than 56% from their offer price of 2,150 rupees ($28.74) a piece. "Perhaps the biggest issue with Paytm is that obviously, it has the opportunity to be the largest payments system in India. However, it's not like other markets — for example, China. Because the government has come in and put in things like UPI," Snell said, which raises questions about monetization for Paytm. United Payments Interface is an infrastructure created by the country's top payments processor, the National Payments Corporation of India. The NPCI is an initiative of the central bank and the Indian Banks' Association. Payment apps built on the UPI infrastructure can access multiple bank accounts in a secure manner and merge services like making digital payments and peer-to-peer money transfer in real time. It is one of the most dominant forms of digital payment in India. While Paytm has its own payments gateway that can process financial transactions, app users can also send money via the UPI system . "Which rather makes the business model of Paytm much harder to monetize," Snell told CNBC. "I think we have a few question marks over whether they can really monetize the assets over the coming few years." He said that greater regulatory scrutiny into India's fintech industry — similar to what is happening elsewhere — is also a note of concern. "For those two issues, we were a little bit cautious and continue to be a little bit cautious on the business," he said. Still, broadly, Snell said that India's regulatory environment at the moment is "quite supportive," as a result of the country being at its early stages of technology innovation and development, which is similar to how China used to be about 10 to 15 years ago. Scrutiny is set to increase over the next decade, according to the fund manager. "It would be very important to invest in those companies that are on the right side of the regulatory boundaries," he added.