Paytm pre-IPO investors seem not in a hurry to sell, say analysts

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Paytm's pre-IPO investors, which include likes of Warren Buffet's Berkshire Hathway, SoftBank, Elevation Capital and Alibaba, do not seem to be in a hurry to exit the company as they continue to believe in its long-term prospect, analysts said.

On Tuesday, 86 per cent of Paytm's shares became free to trade after end of lock-in period but that had a minimal impact on the stock.

Market participants have been speculating on Paytm, post expiry of lock-in for pre-IPO investors.

"Paytm's lock-in expiry had no impact on the share price as the company's robust performance continues to impress investors." Avinash Gorakshakar, Director, Research, Profitmart Securities, said about Paytm.

Paytm's pre-IPO investors like Warren Buffet, SoftBank, Elevation Capital, Alibaba are long-term investors.

SoftBank's Masayoshi Son is reportedly not in a hurry to exit from its investments like Paytm, PB Fintech, Delhivery. The investor doesn't want to trigger panic selling.

Rahul Sharma, co-founder, Equity99 Advisors, said, "The marquee investors of Vijay Shekhar Sharma-led digital company are in no hurry to sell."

Paytm has impressed its investors with continued strong performance. The company recently announced Q2 FY23 financials and had posted a 76 per cent y-o-y growth in revenue to Rs 1,914 crore.

Meanwhile, the company's losses reduced by 11 per cent on a sequential basis. The company's contribution profit surged 224 per cent y-o-y to Rs 843 crore.

On Monday, the company announced that in its rapidly growing lending business, it had disbursed 3.4 million loans in October, registering a y-o-y growth of 161 per cent.

The value of total loans disbursed in October grew to Rs 3,056 crore (USD 407 million, y-o-y growth of 387 per cent). Paytm's leadership in offline payments strengthened further with its total merchant subscription devices deployed increasing to 5.1 million. For October, the total merchant GMV processed through Paytm aggregated to Rs 1.18 lakh crore (USD 14 billion), marking a y-o-y growth of 42 per cent.

In fact this continued growth has also brought Paytm a thumbs up from major brokerages like JP Morgan, Morgan Stanley, Goldman Sachs, Dolat Analysis & Research Themes, and CITI.