Shares of One97 Communication, which operates India’s largest payments platform, Paytm, fell to a fresh intraday low of Rs 483.30 on the BSE on Tuesday, while the market firm. The stock fell below the previous low of Rs 511 on May 12, 2022.
The stock was down 8% at Rs 492.15 at 10:10 am, while the S&P BSE Sensex rose 0.24%. The fintech company’s shares have fallen 26% in the past two weeks. Shares of Paytm have more than halved or plunged 64% in the last year, compared with a 4.8% rise in the benchmark index.
Currently, Paytm is trading at a discount of 78% to its IPO price of Rs 2,150 per share. The stock hit an all-time high of Rs 1,961 on its listing day on November 18, 2021.
On November 17, 2022, SoftBank Group sold a 4.5% stake in Paytm for Rs 1,630 crore. SoftBank Vision Fund (SVF) India Holdings (Cayman) sold shares at Rs 555.67 per share, block trade data showed. After the transaction is completed, SVF India Holdings (Cayman)’s shareholding in Paytm will drop from 17.45% on September 30, 2022, to 12.93%.
The data showed that Morgan Stanley Asia Singapore Pte Ltd, Societe Generale ODI and BOFA Securities Europe Ltd bought the shares.
Paytm is India’s leading digital ecosystem, with 337 million consumers and over 21 million merchants. The Paytm ecosystem includes payment services for consumers and merchants, financial products such as mobile banking services through Paytm Payments Bank, loans, insurance and wealth management/brokerage services to complement its e-commerce and e-ticketing platforms. In FY21, 75% of Paytm’s revenue came from payments and financial services, most of which came from payment services.
Analysts at BofA Securities have a “neutral” rating on Paytm. The brokerage is optimistic about the fundamentals and sees room for Paytm to scale aggressively without taking any balance sheet risk. While Paytm has key differentiators compared to its peers, overall, the brokerage expects a slower path to monetisation given increased competition and regulatory risk, resulting in a delay in EBITDA breakeven. “In our view, the lending business presents an upside option for Paytm, giving Paytm room to expand upon execution,” the analyst said in a second-quarter earnings update.
