Paytm hits new all-time low, stock tanks 26% in two weeks

Shares of Paytm hit a new low at Rs 483.30 on the BSE in Tuesday's intra-day trade, thus were now trading 77 per cent below the company's IPO price of Rs 2,150 per share.

Shares of One97 Communications, which operates India's largest payments platform Paytm, hit a new low of Rs 483.30 as they slipped 10 per cent on the BSE in Tuesday’s intra-day in an otherwise firm market. The stock fell below its previous low of Rs 511, touched on May 12, 2022.

At 10:10 am, the stock traded 8 per cent lower at Rs 492.15, as compared to 0.24 per cent rise in the S&P BSE Sensex. In the past two weeks, the stock of the fintech company has tanked 26 per cent. In the last one year, the stock price of Paytm, more-than-halved or plunged 64 per cent, as against 4.8 per cent gain in the benchmark index.

Currently, Paytm shares trade 78 per cent below its IPO price of Rs 2,150 per share. The stock had hit a record high of Rs 1,961 on its listing day, i.e. November 18, 2021.

On November 17, 2022, SoftBank Group Corp sold a 4.5 per cent stake in Paytm through block deals for Rs 1,630 crore. SoftBank Vision Fund (SVF) India Holdings (Cayman) had sold shares at price of Rs 555.67 per share, the bulk deal data shows. Post transaction, SVF India Holdings (Cayman) holding in Paytm declined to 12.93 per cent from 17.45 per cent as on September 30, 2022.

The shares were bought by Morgan Stanley Asia Singapore Pte, Societe Generale – ODI and BOFA Securities Europe SA, the data shows.

Paytm is India's leading digital ecosystem with 337 million consumers and 21 million plus merchants. The Paytm ecosystem covers payment services for consumers and merchants, financial offerings like mobile banking offerings through Paytm Payments bank, lending, insurance, and wealth management/broking services in order to complement its e-commerce and e-ticketing platforms. In FY21, Paytm derived 75 per cent of its revenues from payment and financial services, with majority of revenue coming from payment services.

Analysts at BofA Securities have a ‘Neutral’ recommendation on Paytm. The brokerage firm said it is optimistic on fundamentals and see room for Paytm to scale up aggressively without taking any balance sheet risks. While Paytm has key differentiating factors versus peers, overall given higher competition & additional regulatory risks, the brokerage firm expects slower path to monetization leading to delayed EBITDA breakeven. “In our view, the lending business provides an upside optionality to Paytm giving Paytm room to scale up subject to execution,” analysts said in Q2 result update.